TEXT-S&P rates Huntsman International debt

Overview
-- Salt Lake City-based Huntsman International LLC plans to issue $300
million of senior unsecured notes for refinancing.
-- We are assigning a 'BB-' issue rating and '5' recovery rating to these
notes.
-- We are affirming all our ratings on Huntsman International LLC and its
parent company, Huntsman Corp., including the 'BB' corporate credit rating.
-- The stable outlook indicates that actions Huntsman is taking to
restructure certain operations and continue to gradually reduce debt should
permit it to maintain credit quality despite a tepid global economic outlook
and headwinds in its titanium dioxide business.

Rating Action
On Nov. 2, 2012, Standard & Poor's Ratings Services assigned its 'BB-' rating
and '5' recovery rating to Huntsman International LLC's proposed offering of
$300 million of senior unsecured notes due 2020. The '5' recovery rating
indicates our expectation of modest (10%-30%) recovery in the event of a
payment default. The company plans to use proceeds from the notes offering to
repay an equivalent amount of senior unsecured notes due 2016.

Rationale
The ratings reflect Salt Lake City-based Huntsman's "satisfactory" business
risk profile and "aggressive" financial risk profile.
Huntsman is a holding company with diverse chemical operations that generated
sales of more than $11 billion in 2011. Business strengths include a broad
product portfolio, with increasing emphasis on differentiated products,
favorable raw material costs in North America, and a well-established presence
in Asia (which accounts for about 25% of sales). Key products and some of
their uses include:
-- MDI (methylene diphenyl diisocyanate)-based polyurethanes (foam for
building insulation, autos, and footwear), its input propylene oxide, and the
latter's co-product MTBE (methyl tertiary butyl ether, used as a gasoline
additive outside the U.S.);
-- Performance products (amines, surfactants, and carbonates used in
agrochemicals, cleaning products, and lubricants);
-- Pigments (titanium dioxide used in paints and coatings);
-- Advanced materials (polymers for coatings, construction, auto, and
aerospace); and
-- Textile effects (dyes and other chemicals used to treat textiles).

The business risk profile assessment also reflects a number of constraining
factors, including a significant manufacturing presence in high-cost
locations, such as Europe (where restructuring actions are currently
underway), exposure to raw material cost swings and cyclical end markets, and
comparatively low EBITDA margins in most businesses.

Huntsman's financial profile has strengthened considerably during the past two
years. Moreover, we believe earnings will continue to improve in most
businesses during the next two years based on our expectation of subdued
global economic growth; prospects for higher sales of Huntsman's products to
auto and construction markets because of increased product penetration and
supportive regulations affecting demand for insulation; restructuring
benefits; and favorable raw material costs in North America. As a result, we
believe the company can sustain 10% to 13% EBITDA margins despite the
potential for more subdued results in its titanium dioxide business, which
have been cyclically strong and are benefiting from favorable ore contracts
expiring at the end of 2012. In addition, we believe Huntsman will continue to
incrementally reduce debt. Consequently, we think it can maintain funds from
operations (FFO)-to-total adjusted debt above 20% over the long term, although
this ratio could dip below 20% during the next year. FFO-to-debt was 22% as of
Sept. 30, 2012. We adjust debt to include about $900 million of tax-effected
unfunded postretirement liabilities, capitalized operating leases, and
environmental liabilities.

We base our assumptions, in part, on management's commitment to maintaining
net debt to adjusted EBITDA of 2.0x to 2.5x (it was 2.3 x as of Sept. 30,
2012) and focus on continuing to reduce debt to achieve that. The 2.0x to 2.5x
net debt-to-EBITDA range is equivalent to about 3.0x to 3.5x total
debt-to-EBITDA after Standard & Poor's adjustments. We believe Huntsman's
growth strategy will emphasize incremental capacity expansion, joint ventures,
and bolt-on acquisitions as opposed to large, debt-financed transactions that
could materially weaken leverage metrics.

Liquidity
Liquidity is "adequate" as defined in our criteria, and we believe Huntsman
has sufficient sources of liquidity to cover its needs during the next 12-18
months even if economic conditions deteriorate or performance weakens. As of
Sept. 30, 2012, the company had more than $1 billion of liquidity consisting
of $435 million of unrestricted cash, $381 million of unused borrowing
capacity under its $400 million revolving credit facility maturing in 2017,
and $213 million available under two accounts receivable securitization
programs that mature in 2014. The maturity of the revolver will accelerate if
Huntsman does not repay, refinance, or have a specified minimum level of
liquidity to enable it to repay certain debt maturing in 2014 and later.

Our assessment of Huntsman's liquidity is based on the following expectations:
-- The company's sources of liquidity, including surplus cash and
committed credit availability, will exceed its uses by at least 1.2x despite
potential volatility in working capital requirements, and it will remain
comfortably in compliance with financial covenants in its credit facilities.
-- Cash flow generation should be adequate to cover expected capital
spending of $425 million to $450 million, as well as a moderate amount of
pension and restructuring outlays and incremental debt reduction.
-- A refinancing earlier this year lengthened debt maturities, but
meaningful amounts remain due in 2014. We expect management to refinance these
obligations in a timely manner.

Recovery analysis
Huntsman's senior secured debt is rated 'BB+' (one notch above the corporate
credit rating) with a recovery rating of '2', indicating our expectation for
substantial (70%-90%) recovery in the event of a payment default. Its senior
unsecured debt is rated 'BB-' (one notch below the corporate credit rating)
with a recovery rating of '5', denoting modest (10%-30%) recovery prospects,
and its subordinated debt is rated 'B+' (two notches below the corporate
credit rating) ,with a recovery rating of '6', reflecting our expectation that
recovery would be negligible (0%-10%). For the complete recovery analysis, see
our recovery report on Huntsman published May 1, 2012.

Outlook
The outlook is stable. Huntsman's credit metrics are consistent with our
expectations at the ratings, including FFO-to-debt of greater than 20%. Ratios
could weaken somewhat during the next year amid a tepid global economy and
softer titanium dioxide markets. However, thereafter we expect Huntsman's
credit measures to be solidly in line with our ratings expectations, helped by
better economic conditions, restructuring benefits, and further modest debt
reduction.

Nevertheless, we could lower the ratings if earnings deteriorate because of a
deeper and prolonged recession in Europe, or substantial economic
deterioration in the U.S. or China, or if pigment segment earnings plummet. We
could also lower the ratings if the company unexpectedly increases debt for a
major acquisition or shareholder rewards. Given Huntsman's current business
risk profile, an upgrade would require the financial risk profile to
strengthen to a greater degree than we believe management is currently
committed to, including FFO-to-debt above 25% on a sustainable basis.

Related Criteria And Research
-- Methodology And Assumptions: Liquidity Descriptors For Global
Corporate Issuers, Sept. 28, 2011
-- Criteria Methodology: Business Risk/Financial Risk Matrix Expanded,
Sept. 18, 2012
-- Key Credit Factors: Criteria For Rating Companies In The Global
Commodity Chemicals Industry, Sept. 19, 2012
-- Key Credit Factors: Business And Financial Risks In The Commodity And
Specialty Chemical Industry, Nov. 20, 2008

Ratings List
Ratings Affirmed

Huntsman Corp.
Hunstman International LLC
Corporate credit rating BB/Stable

Huntsman International LLC
Senior secured BB+
Recovery rating 2
Senior unsecured BB-
Recovery rating 5
Subordinated B+
Recovery rating 6

Ratings Assigned
Huntsman International LLC
$300M senior unsecured nts BB-
Recovery rating 5

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