Moody’s may upgrade Dow on $2.16bn arbitration award

29 May 2012 17:15  [Source: ICIS news]

HOUSTON (ICIS)--Moody’s may upgrade Dow Chemical’s credit rating when the US chemical giant receives its $2.16bn (€1.73bn) arbitration award stemming from its failed K-Dow joint venture, the investor service company said on Tuesday.

Moody’s said it viewed Dow’s award by the International Court of Arbitration of the International Chamber of Commerce (ICC) as a credit positive, and it could lead to an upgrade of Dow’s rating. Dow has a Baa3 issuer rating, with a positive outlook.

Dow said on 24 May it had been awarded $2.16bn relating to the collapse of its planned venture with Kuwait’s Petrochemical Industries Corp (PIC).

The failed K-Dow joint venture dates to December 2007, when Dow and PIC announced the agreement to create the company.

However, Kuwait ruled in December 2008, at the height of the global financial crisis, that PIC should withdraw from the planned olefins and polyethylene joint venture.

On Monday, Kuwait announced a ministerial committee was formed to probe the reasons behind the cancellation of the joint venture, according to the Kuwaiti news agency.

“The probe is to cover the efforts made by the defence team of Kuwait’s oil sector mandated to assert the soundness and the viability of the partnership deal” before it was cancelled, said Kuwaiti oil minister Hani Abdulaziz.

($1 = €0.80)

Additional reporting by Al Greenwood

By: Brian Ford
+1 713 525 2653

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