Fitch affirms Dow Chemical

Fitch Ratings said it affirmed the BBB long-term issuer default and debt ratings of Dow Chemical Co. and of Rohm and Haas Co.

The outlook is negative.

Ratings reflect the company's size, scale and market positions in many segments of the chemicals industry and the potential to generate significant free cash in better economic conditions, according to the agency.

The affirmation considers the announcement that the company is offering $1.625 billion of common stock to pay down a portion of the bridge facility and a portion of the company's high-coupon perpetual preferred stock, series B owned by the Haas family trusts and Paulson & Co.

Dow also is considering an offering of senior unsecured notes with proceeds also expected to be used for repayment of outstanding under the bridge facility and additional perpetual preferred stock, series B.

Without proceeds from asset sales, the company's leverage is likely to be 5 times EBITDA over the course of 2009, the agency said. Even with a hypothetical return to more normalized volumes and margins, its debt-to-EBITDA ratio would likely be more than 3x, Fitch said.

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