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S&P upgrades LyondellBasell
Standard & Poor's said it raised the corporate credit rating on LyondellBasell Industries NV to BBB from BBB-.
The agency also raised the senior unsecured debt issued by LyondellBasell and subsidiary LYB Finance Co. BV to BBB- from BB+.
The debt at both entities is rated one notch below the corporate credit rating because of its structural subordination to operating and pension liabilities at operating subsidiaries, S&P said.
The outlook is stable.
LyondellBasell generated near industry-leading overall adjusted EBITDA margins of 13% in 2012 despite significant operations in Europe, a region where producers are at a cost disadvantage because their primary input, naphtha, is oil based and demand is currently weak, S&P said.
During the next several years, the agency said it expects de-bottlenecking and capacity expansions at existing operations to generate additional earnings and cash flow, helping to offset the impact of more competitive global market conditions.
The company also operates in a cyclical industry, but earnings and cash flow should remain strong for the next several years, S&P said.
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