Moody's raises Equistar liquidity rating

Moody's Investors Service said it confirmed the B1 senior implied rating of Equistar Chemicals LP and B2 senior unsecured notes and debentures ratings and raised the company's speculative grade liquidity rating to SGL-3 following its recent refinancing of its credit facility and accounts receivable facility.

The outlook is stable.

Moody's said Equistar recently replaced its $354 million credit facility and $100 million accounts receivable facility with a $450 million accounts receivable facility and $250 million secured credit facility (secured by inventory).

These facilities significantly improve the company's liquidity due to the absence of financial covenants and the extended maturity - December 2007. Although draw downs on these facilities are tied to the current level of accounts receivable and inventories, Equistar should have ample liquidity to fund its operations.

Additionally, Equistar has refinanced $80 million of the $100 million rail car lease that terminated in the fourth quarter. The new leases considerably extend the term of the lease and do not contain ratings triggers, thereby further improving the company's liquidity.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.