MOSCOW (MRC) -- Moody's Investors Service upgraded its rating on LyondellBasell Industries N.V., one of the major petrochemical global producers and the world's largest maker of polypropylene, one notch further into investment grade, citing recent changes to the chemical company's board and the further decline in equity ownership by private-equity firm Apollo Global Management LLC, reported The Wall Street Journal.
Moody's lifted the company's rating to Baa2, two steps into investment grade, from Baa3. The outlook is positive.
The ratings firm said its upgrade reflects the election of an independent vice chairman who will succeed the chairman and lead the supervisory board effective in September and the decline in the equity ownership by affiliates of Apollo Management since November, as well as strong pro forma credit metrics.
LyondellBasell's new rating is supported by its size, operating diversity, extremely strong financial metrics, leading market positions in key commodities and a management team with a track record of conservative fiscal stewardship in the petrochemical industry. The company also benefits from a low-cost feedstock position in the U.S., which will help earnings and cash flow to increase over the next several years as the company completes a number of expansion projects and restarts idled capacity.
The firm said its positive outlook reflects expectations that the ownership stake held by Apollo will continue to decline, along with its disproportionate board representation.
Last week, LyondellBasell's board raised the company's quarterly dividend by 25% and approved the repurchase of up to 10% of its stock over the next 12 months, moves to increase shareholder return.
We remind that, as MRC informed previously, LyondellBasell will raise its ethylene capacity in North America by 18% in coming years through several debottlenecking projects. Locations where ethylene capacity will be expanded include crackers in Corpus Christi, La Porte and Channelview, Texas, according to the company. The projects are scheduled to be finished in 2014 and 2015.
LyondellBasell Industries NV is a manufacturing company. The Company produces chemicals, fuels, and polymers used for packaging, clean fuels, durable textiles, medical applications, construction materials, and automotive parts. LyondellBasell Industries operates globally and is headquartered in the Netherlands. LyondellBasell is also a leading licensor of polypropylene and polyethylene technologies. The more than 250 polyolefin process licenses granted by LyondellBasell are twice that of any other polyolefin technology licensor.
MRC