Dow's Credit Outlook Upgraded By Fitch

Fitch Ratings has raised its outlook on Dow Chemical’s BBB credit rating from negative to stable. The change suggests that the company is no longer in imminent danger of a credit downgrade. Fitch downgraded Dow’s credit rating from BBB+ to BBB back in March 2009, the same month that Dow hashed out a deal to salvage its acquisition of Rohm and Haas. That deal came three months after the Kuwaiti government scuttled the sale of half of Dow’s commodity chemicals business to Petrochemical Industries Co. of Kuwait. Since those events, Fitch analyst Sean Sexton writes in a report, Dow has done a good job of handling its debt crisis. It generated $3.4 billion by selling several businesses. Dow also issued $8.75 billion in new debt and $3.25 billion in equity. However, the report warns that despite cutting its dividend last year, Dow still has relatively weak cash flow. Moreover, Sexton noted that Dow’s debt level is “still high for the rating.”