Moody's changes Lucite outlook to positive

Moody's Investors Service said it changed the outlook to positive from stable for the B3 senior notes rating of Lucite International Group Holdings Ltd. and its subsidiaries, including B3 ratings of Lucite International Finance plc's €250 million senior notes.

The outlook change is based on Moody's view that Lucite's debt protection measures have steadily improved since the group's initial rating in 2001; the market outlook for Methyl Methacrylate and its downstream applications is positive with limited capacity increases expected in the short term; following Lucite's investment in a 93 kte plant in China, no significant acquisition or other large capital investment will be made by the group in the next 12 to 18 months; and the improvement in covenant and liquidity headroom following the group's recent €50 million bond issue.

Moody's said Lucite has considerably reduced leverage with a last-12-months [net debt/ (EBITDA-CAPEX)] ratio of 4.8x as of Sept. 30 vs. 8.6x at the end of 2002, a very difficult year for Methyl Methacrylate producers who experienced high raw material prices (acetone and methanol) that were only partly passed through and often with a time-lag.

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