S&P ups Lyondell, units

Standard & Poor's said it raised its ratings on Lyondell Chemical Co. and its 100%-owned affiliates, Equistar Chemicals LP and Millennium Chemicals Inc. and simultaneously removed the ratings from CreditWatch positive, where they were placed on Feb. 4.

S&P raised Lyondell's corporate credit rating and senior secured debt rating to BB- from B+ and subordinated debt to B from B-, Equistar's corporate credit and senior unsecured debt ratings to BB- from B+ and senior secured bank loan to BB from BB-, Millennium Chemicals' corporate credit and senior unsecured notes ratings to BB- from B- and Millennium America's senior secured bank loan to BB from BB- and senior unsecured notes to BB- from B+.

S&P said the rating actions, including the upgrade of the corporate credit ratings to BB- from B+, reflect favorable operating prospects over the intermediate term and the strong expectation that management will continue to prioritize debt reduction as the chemicals cycle gradually improves.

The ratings reflect an improving but still-aggressive capital structure stemming from its 1998 acquisition of ARCO Chemical Co., which overshadows the company's satisfactory business profile derived from leading positions in several commodity chemical product categories and financial policies that support restoration of the financial profile, S&P said.

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