Chemical Finance Digest, Dec. 5-9

Topping the headlines last week, some of the industry’s biggest companies revised their earnings guidance. DuPont cut its fourth-quarter earnings outlook by about 21%-26% to 29-37 cts/share, due to lower demand and inventory destocking. 3M affirmed its full-year 2011 guidance, which stands at $5.85-$5.95/share, and forecast 6% EPS growth for 2012. Monsanto increased its fiscal first-quarter guidance to about 15-20 cts/share on strength in Brazil and Argentina.

In other earnings news, KMG Chemicals reported flat year-on-year net income growth for its fiscal first-quarter.

In M&A news, Honeywell has acquired a portfolio of polyethylene wax technologies from Evonik. The portfolio includes Ziegler-Natta catalysts, which are used in a variety of petrochemical production processes. Meanwhile, Israel Chemicals has bought out Chemtura’s 50% stake in the Tetrabrom fire retardants joint venture, and IMCD has acquired a fine chemicals distributor in Italy and a sales business in Australia.

Equity markets continue to be quiet, at least in terms of new issues, though Cytec is launching a $200 million share buyback, replacing a completed $150 million program, which was launched in January. Cytec had about $406 million in cash and cash equivalents as of September 30.

In case you were wondering if lending for big M&A deals is still available, Ecolab continues to press ahead with its capital restructuring after the Nalco deal. The latest is a $3.75 billion debt issue, in four tranches, that will be used to pay down Nalco’s remaining senior debt, which is higher-interest, and repay commercial paper borrowings used to fund the deal. The debt is quite low-interest – a $500 million three-year tranche carries an interest rate of 2.375%, while a $1.25 billion five-year tranche carries a rate of 3%. The longer-term tranches, one a ten-year issue worth $1.25 billion, and the other a thirty-year issue worth $750 million, carry interest rates of 4.35% and 5.5%, respectively. Moody’s has rated the debt ‘Baa1.’ Market reaction to the Ecolab-Nalco merger has generally been positive, with Ecolab’s shares trading close to their 52-week high.

The week ahead will see November’s U.S. industrial production numbers released on Thursday. Consensus is for growth of 0.2% after a strong October.