Moody's: Westlake Chemical unaffected

Moody's Investors Service said it does not expect Westlake Chemical Corp.'s agreement to purchase Eastman Chemical Co.'s polyethylene business for $225 million to meaningfully alter the company's credit profile as the transaction will be funded with its existing cash balance. Moody's had anticipated that the company would use its large cash balance for acquisitions or future capital investments.

Although, this acquisition will consume the majority of Westlake's balance sheet cash (cash and cash equivalents of $276 million as of June 30), the agency said it represents a fairly low price for the assets being acquired. Additionally, the impact on the company's liquidity is modest as Westlake is expected to remain free cash flow positive over the next year and has access to a committed $300 million revolver.

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