Fitch affirms Lyondell, Equistar, Millennium; cuts Lyondell notes to B, rates Lyondell loans BB+

Fitch Ratings said it affirmed and removed from rating watch evolving the ratings for Lyondell Chemical Co. and Equistar Chemicals LP following Lyondell's announcement that it will acquire the remaining 41.25% interest held by Citgo Petroleum Corp. in Lyondell-Citgo Refinery LP for $2.1 billion.

Fitch affirmed Lyondell's BB- issuer default rating, BB+ senior secured credit facility and BB+ senior secured notes and debentures and affirmed Equistar's issuer B+ default rating, BB+ senior secured credit facility and BB- senior unsecured notes BB-.

At the same time, Fitch downgraded Lyondell's senior subordinated notes rating to B from B+ and prospectively assigns BB+ ratings to Lyondell's new $800 million senior secured revolving credit facility and $2.65 billion senior secured term loan.

Fitch also affirmed Millennium Chemicals Inc.'s B+ issuer default rating and BB convertible senior unsecured debt and Millennium America, Inc.'s B+ issuer default rating, BB+ senior secured credit facility and term loan and BB senior unsecured notes.

The rating affirmations for Lyondell are supported by the increased access to cash flow from Lyondell-Citgo Refinery LP as a result of its acquisition of Citgo's remaining 41.25% in the refinery. The rating affirmations for Equistar are supported by Fitch's view that the credit profile at Equistar will not materially change as a result of the purchase of Citgo's remaining share of Lyondell-Citgo Refinery LP. The rating affirmations for Millennium reflect Fitch's view that the credit profile at Millennium will also not materially change as a result of the purchase of Citgo's remaining share of Lyondell-Citgo Refinery LP.

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