Moody's ups Lubrizol to Aa2

Moody's Investors Service said it upgraded the Lubrizol Corp.'s ratings to Aa2 following the acquisition by Berkshire Hathaway Inc. (Aa2, Prime-1 ratings / stable outlook), which now guarantees Lubrizol's public debt.

The outlook is stable.

Moody's said that Lubrizol has four public debt issues totaling $1.35 billion that are guaranteed by Berkshire Hathaway. The debt remains outstanding following the acquisition and is expected to be repaid at maturity.

Future Lubrizol capital requirements will be satisfied with intercompany funding sources, according to a news release. The company is expected to file a Form 25 with the SEC to remove its shelf registration, and as a result, Moody's said it will withdraw the ratings on the shelf.

The agency said that the upgrade of Lubrizol's ratings to Aa2, which is the same level as Berkshire Hathaway's long-term ratings, reflects the credit support provided by the Berkshire Hathaway parental guarantee of Lubrizol's rated public debt and Berkshire Hathaway's strong credit profile. Moody's said it believes that the guarantee's provisions and language allow for the substitution of Lubrizol's credit profile with that of Berkshire Hathaway.

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