S&P puts Lyondell, Equistar on positive watch

Standard & Poor's said it placed Lyondell Chemical Co.'s BB- corporate credit and senior secured debt ratings, B subordinated debt rating and Equistar Chemicals LP's BB- senior unsecured debt rating on CreditWatch with positive implications.

The agency also affirmed Lyondell's B-1 short-term corporate credit rating to reflect the company's continuing strong liquidity, which is supported by the favorable chemicals business cycle, Lyondell's substantial cash and availability under committed credit facilities, modest capital spending plans and a manageable near-term debt maturity profile.

The positive CreditWatch placement follows the recent announcement that Lyondell and Citgo Petroleum Corp., partners in Lyondell-Citgo Refining LP, have signed a letter of intent to explore the sale of Lyondell-Citgo's Houston refinery, which could provide meaningful cash proceeds to Lyondell. S&P said the ratings could be raised following the successful completion of the transaction if management uses the majority of proceeds to accelerate its plans to reduce debt.

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