Fears of bankruptcy depresses LyondellBasell's bond value to barely 10% of face value

06-Jan-09

As the company seems poised on the verge of bankruptcy, LyondellBasell's bonds traded at a value at approximately 10% of face value. Currently, the company is caving under the weight of a US$26 bln debt and deteriorating product demand, Bonds issued by Lyondell traded at 10-12% of face value, while the Euro denominated Basell bonds were quoted at about 5% of face value. LyondellBasell is working with its banks, including Merrill Lynch, Goldman Sachs, Citigroup, Royal Bank of Scotland and UBS, to restructure its debt swiftly.Lenders had set a deadline for an agreement last Sunday but talks appear to be continuing even after a deal was not reached on time. It is likely that the company's debt restructuring could involve substantial losses for some creditors, especially non-senior lenders.