LyondellBasell lenders may lose 90% as takeover sours

Business Materials 31 December 2008 20:30 (UTC +04:00)

LyondellBasell Industries AF lenders face losses of more than 90 cents on the dollar as the chemicals maker struggles to restructure debt that financed a $12.7 billion takeover a year ago, Bloomberg reported.

LyondellBasell's $615 million of 8.375 percent notes due in 2015 were last quoted at 7 cents on the dollar, according to Trace, the Financial Industry Regulatory Authority's bond-price system. The $225 million of 9.8 percent notes due in 2020 were priced at 25 cents on the dollar, Trace data shows.

The chemicals maker, controlled by billionaire Len Blavatnik, is considering filing for bankruptcy, the Wall Street Journal said today, citing unidentified people familiar with the matter. The Rotterdam-based company is a victim of the collapse in home and auto sales that has depressed demand for everything from car bumpers and dashboards to countertops and paint.

"A debt restructuring is likely to involve substantial principal losses for some creditors, especially non-senior lenders," Standard & Poor's analysts led by Tobias Mock in Frankfurt wrote in a report late yesterday.

LyondellBasell is in "selective default" after postponing $280 million of interest payments and faces a "rapidly weakening liquidity position" with $26 billion of debt, S&P said. The company said in an e-mailed statement yesterday that it's "not currently in default according to its agreements with its lenders."

2007 Takeover