Chemicals firms relax views on credit ratings

By Kristina Cooke

LONDON (Reuters) - European chemicals companies have an increasingly relaxed view of their credit ratings, as corporate leaders focus on flexibility to pursue business opportunities in the sector.

A string of major European companies have relaxed their attitude to debt recently in the pursuit of growth, or to boost shareholder rewards or change strategy, often leading to higher borrowing costs and, sometimes, a smaller base of debt investors.

While the companies speaking at the Reuters Chemicals Summit last week said they felt comfortable with their current ratings, most said financial flexibility would take priority, even if it meant downgrades.

"While ratings give you credibility, they are not the dictatorship of the financial markets," Air Liquide (AIRP.PA: Quote, Profile, Research, Stock Buzz) chief executive officer Benoit Potier told the summit, held at the Reuters office in Frankfurt.

"The business tells you what to do, and you have to be able to seize opportunities."

Potier said Air Liquide, the world's top industrial gases company, was ready for small and medium-sized takeover opportunities, and would look at assets that rival Linde (LING.DE: Quote, Profile, Research, Stock Buzz) might have to sell if it succeeds in its takeover of British rival BOC BOC.L.

Meanwhile, Linde's Chief Executive Officer Wolfgang Reitzle said he expected the ratings on his company would fall after its 8.2 billion pound purchase of BOC.

"It is clear that we will be downgraded from where we are today," he said, but added he had received signals from the ratings agencies that the downgraded rating would still be investment grade.  Continued...