Moody's lowers Dow Chemical

Moody's Investors Service said it lowered the senior unsecured ratings of Dow Chemical Co. to Baa1 from A3.

The company's ratings remain under review for possible downgrade.

The downgrade follows the company's announcement that the Supreme Petrochemical Council of Kuwait has reversed its prior approval of the agreement between Dow and PIC to create a 50/50 venture K-Dow Petrochemicals. The agency said the cancellation of this transaction, which would have provided $9 billion to fund Dow's pending $15.4 billion acquisition of Rohm & Haas Co., substantially increases the likelihood that Dow's credit profile will be weakened in any reasonable scenario.

The downgrade reflects the likelihood that the political situation in Kuwait will make it more difficult to successfully complete the K-Dow transaction even at a lower price and the lack of any contractual exit from the Rohm & Haas acquisition, Moody's said.

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