Moody's may lift Sterling

Moody's Investors Service said it placed under review for possible upgrade Sterling Chemicals, Inc.'s B3 corporate family and probability of default ratings and B3 senior secured notes due 2015.

The review is prompted by news that the boards of Eastman Chemical Co. and Sterling approved a definitive merger agreement under which Eastman will acquire all of the outstanding equity of Sterling Chemicals for $100 million in cash, subject to certain adjustments.

Under the terms of the transaction, the holders of Sterling's common stock will receive $2.50 per share in cash. Eastman will be the surviving entity in the merger.

The transaction has no impact on Eastman's ratings or outlook, Moody's said.

Neither company has indicated publicly the plans for the debt at Sterling, notwithstanding the presence of a redemption/call provision nor a change of control put, the agency said.

The review will consider the nature and structure of the acquisition financing and the implications for Sterling's debt, Moody's said.

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