Moody's ups LyondellBasell

Moody's Investors Service said it upgraded the corporate family rating of LyondellBasell Industries NV to Ba2 from Ba3 following the company's recent announcement that independent directors now constitute a majority of its board.

Moody's affirmed the speculative-grade liquidity rating at SGL-1 and raised the guaranteed senior secured first-lien term loan and notes to Ba1 (LGD3, 35%) from Ba2 (LGD3, 37%) and guaranteed senior secured third-lien notes to Ba3 (LGD4, 66%) from B2 (LGD5, 81%).

The outlook is stable.

LyondellBasell continues to outperform expectations due to strong demand and advantaged feedstocks, resulting in extremely strong financial metrics, the agency said. This level of performance appears to be sustainable over the next few years.

The ratings reflect the company's limited operating history post-bankruptcy and its secured debt capital structure as well as the perception of elevated event risk due to the concentration of share ownership and board representation by Apollo Management and Access Industries, the agency said.

The ratings are supported by the company's large size, operational diversity, significant vertical integration, leading market positions in key commodities and a management team with a track record of conservative financial management in the petrochemical industry, the agency added.

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