Moody’s lowers Celanese outlook to 'stable'

24 December 2009 14:11  [Source: ICIS news]

TORONTO (ICIS news)--Moody’s has lowered its outlook for US-based chemicals major Celanese to “stable” from “positive” because of a slow recovery in the firm’s credit metrics, the ratings agency said in a statement late on Wednesday.

"While [Celanese’s] net debt metrics would be supportive of a higher rating, the company will likely use the cash for additional capital investments and acquisitions to expand its product portfolio and provide access to new technology," meaning that credit metrics would recover slower than previously expected, Moody's said.

But at the same time, Moody’s reaffirmed its long term ratings for Celanese subsidiaries Celanese US Holdings LLC and Crystal US Holdings 3 LLC at Ba2, affecting some $3.0bn (€2.1bn) in debt in total, it said.

Celanese's earnings in 2010 were expected to benefit from capacity expansion at the firm's integrated acetic acid production complex in Nanjing, China, as well as on-going cost reductions, the agency said.

Also helping in 2010 would be the absence of high cost inventories and lower volumes, which depressed earnings in the first half of 2009, it added.

However, the ratings were “somewhat tempered” by Celanese’s significant exposure to volatile petrochemical feedstocks, as well as the potential for additional share repurchases that may reduce the company’s cash balance, Moody’s said.

Dallas, Texas-based Celanese is a leading global producer of acetyls, vinyl acetate monomer, emulsions, acetate tow and engineered thermoplastics.

($1 = €0.70)

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By: Stefan Baumgarten
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