Fitch rates Westlake notes BBB

Fitch Ratings said it affirmed Westlake Chemical Corp.'s issuer default rating at BBB and removed them from Rating Watch negative.

The agency also said it assigned a stable outlook.

Fitch also said it assigned a BBB rating to Westlake's new issuance of senior unsecured notes.

The watch was removed and a stable outlook was assigned to reflect an expectation that funds from operations-to-adjusted leverage will trend toward 2.5x by the end of 2018 based on Westlake's efforts to accelerate debt repayments, the agency said.

In June 2016, Westlake announced that it intends to acquire Axiall Corp. in an all-cash transaction valued at $3.8 billion, giving rise to roughly $3 billion in additional debt, Fitch said.

The merged company will maximize integration from ethylene production through polyvinyl chloride (PVC) and add scale to Westlake's PVC resin and vinyl-based building products, the agency explained.

While the oil price drop has cut into margins, Westlake continues to benefit from low feed stock prices, particularly ethane, Fitch said.

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