Fitch upgrades Dow Chemical

Fitch Ratings said it upgraded the long-term issuer default rating of Dow Chemical Co. to BBB+ from BBB and removed the Rating Watch positive.

Dow Holdings Inc. will be the holding company for Dow.

The outlook is stable.

The rating reflects the benefits from the company's significant scale and diversification, relatively high margins, consistently strong cash flow generation and low cost position, Fitch said.

The removal of the positive watch follows management's disclosure on the new company's asset base, capital structure and capital allocation policy, the agency said.

Fitch said it assumes the company's total debt-to-EBITDA ratio will be less than 2x throughout the post-spin forecast.

The new company will remain the largest North American chemical company with patent-advantaged products representing a material portion of revenues, the agency said, and leading market positions in many commodity and specialty chemicals segments.

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