Paper for Lyondell traded up to 94 1/4 early last week, which is up from the 93 range at the end of September. Dealers said the chemical sector, which had been struggling prior to the Sept. 11 attacks, was directly impacted by the terrorist event. "Lyondell was a par name before Sept. 11," a dealer explained. "Chemical names have just been beat up so bad." Dealers say chemical names are directly linked to the strength of the economy. They say even the connotation of chemicals, especially in war time, is viewed negatively and pushes down levels. "Everybody's got chemicals on their brain right now. In that way, you'd think [chemical credits] would get stronger," a dealer remarked. Lyondell, based in Houston, manufactures polymers and petrochemicals. Calls to Robert Blakely, cfo, were forwarded to an automatic answering service that refused unsolicited calls. Messages to the company were not returned.
Last summer the paper was trading in the 103 range, but even then dealers were predicting a downswing in the chemical industry (LMW, 7/22). By late September, the credit had traded to 97 1/8 (LMW, 9/23). Lyondell has a $1 billion deal that expires in 2003 and breaks down into two tranches. J.P. Morgan, Salomon Smith Barney, Credit Suisse First Boston, and Bank of America are the lead arrangers. Pricing is LIBOR plus 37/ 8%.