Moody's raises LyondellBasell debt rating, places positive outlook

30 May 2013 04:13  [Source: ICIS news]

SINGAPORE (ICIS)--Moody’s has raised its rating on the senior unsecured debt of Netherlands-based producer LyondellBasell Industries to “Baa2” from “Baa3”, and given the firm a positive outlook, the ratings agency said late on Wednesday.

"Despite the announced share repurchase program and increase in the dividend, LyondellBasell is expected to generate extremely strong financial metrics for the Baa2 rating over the next several years," said John Rogers, senior vice president at Moody's, in a statement.

"The positive outlook reflects our belief that the equity stake held by Apollo will continue to decline along with its disproportionate board representation," Rogers added.

LyondellBasell also stands to profit from a low-cost feedstock position in the US, which will boost earnings and cash flow over the next several years as the firm completes a number of expansion projects and restarts idled capacity, according to Moody’s.

While these projects will raise the company’s capital expenditure through to 2016, Moody’s expects that the company will remain “free cash flow positive”.

“Additionally, Moody's expects that the company will continue to generate record or near record earnings over the next several years as these projects come on-stream,” it added.

By: Nurluqman Suratman

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