Rexene Rtgs Remain on S&PWatch, Dev Re: Merger With Huntsman

Business Wire, July 9, 1997

NEW YORK--(BUSINESS WIRE)-- Standard & Poor's CreditWire 7/9/97 -- Standard & Poor's double-'B'-minus rating on Rexene Corp.'s $175 million senior notes due 2004 and double-'B' corporate credit rating remain on CreditWatch with "developing" implications, where they were placed Jan. 2, 1997.

Rexene has entered into an agreement to merge with Huntsman Corp. in a stock transaction valued at about $600 million, including the assumption of Rexene's debt. Privately held Huntsman Corp. is one of the largest chemical companies in North America. If the merger is consummated as proposed, Rexene's corporate credit rating would be affirmed. The rating on the senior notes could be raised to double-'B', affirmed, or lowered to single-'B'-plus depending on the amount of secured debt in Rexene's capital structure following the merger.

The corporate credit rating affirmation would reflect:

-- Rexene's improving position as a mid-tier producer of commodity chemicals and plastic resins;

-- The fairly aggressive capital structure that is likely to be maintained as the company finances its three-year (1996-1998) modernization and expansion initiative, which could cost $200 million or more; and

-- Some benefit to operations and financial flexibility that would be attributable to Rexene's strategic position within the Huntsman business portfolio.

Standard & Poor's will continue to monitor developments. -- CreditWire

CONTACT: Jim Potesky, New York (1) 212-208-1127

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