Fitch: Westlake on watch

Fitch Ratings said it placed the ratings of Westlake Chemical Corp. on negative rating watch following the announcement of its all-cash offer for Georgia Gulf Corp.

Fitch noted that it assumes the transaction could result in leverage of at least 2 times on a pro forma combined basis. This compares to Westlake's latest 12 months ended Sept. 30 total debt to EBITDA of 1.15x.

According to the agency, Westlake's operations benefit from low-cost light feedstock and tight supply against the backdrop of capacity shutdowns during the recession and the ongoing strengthening of the demand recovery.

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