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LyondellBasell (LYB) Prices $1B Senior Notes - Analyst Blog

Shalu Saraf

Chemicals and polymers maker LyondellBasell Industries N.V. LYB announced the pricing of its public offering of $1 billion aggregate principal amount of 4.625% Senior Notes due 2055. The offering is expected to close on Mar 5, 2015, on meeting the customary closing conditions.

The proceeds from the offering will be utilized for general corporate purposes, including repurchases of LyondellBasell’s ordinary shares. Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are the active joint book-running managers for this offering.

LyondellBasell saw lower profits in the fourth quarter of 2014, hit by a hefty inventory-related charge. It recorded earnings from continuing operations of $1.57 per share for the quarter, a nearly 26% fall from $2.11 per share registered a year ago.

Barring a charge of $455 million (post-tax) associated with inventory adjustments, earnings from continuing operations were $2.48 per share for the reported quarter. It topped the Zacks Consensus Estimate of $2.13.
 
Consolidated profit dropped around 33% year over year to $791 million or $1.54 per share in the quarter on lower sales.

For 2014, adjusted earnings from continuing operations of $8.92 per share beat the Zacks Consensus Estimate of $8.48.
 
LyondellBasell recorded revenues of $10,290 million in the reported quarter, down around 8% year over year. Sales were below the Zacks Consensus Estimate of $10,842 million.
 
Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) fell around 9% year over year to $1,406 million. Healthy gains in the company’s olefins and polyolefins businesses were offset by declines in other divisions.

For the full year, revenues rose 3.5% year over year to $45,608 million, but trailed the Zacks Consensus Estimate of $46,419 million.

LyondellBasell plans to advance roughly 1 billion pounds of ethylene expansion projects this year and improve operations at its methanol facility. The company, however, sees reduced margins in 2015 compared with the last year due to lower crude oil prices.

LyondellBasell is a Zacks Rank #4 (Sell) stock.

Better-ranked stocks in the chemical space include Asahi Kasei Corp. AHKSY, Innospec Inc. IOSP and Air Products and Chemical Inc. APD. While Asahi Kasei and Innospec sport a Zacks Rank #1 (Strong Buy), Air Products carries a Zacks Rank #2 BUY.


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