On Jan. 19, 2006, Standard&Poor's Ratings Services affirmed its 'AA-' long-term and 'A-1+' short-term corporate credit ratings on Germany-based chemicals producer BASF AG. The ratings were removed from CreditWatch, where they were placed on Jan. 3, 2006, following the hostile offer for Engelhard Corp. (A-/Watch Pos/A-2) and the intention to make an offer for the construction chemicals business of Degussa AG (BBB+/Watch Neg/A-2). The outlook is negative, reflecting BASF's more aggressive financial policy and its willingness to spend significantly higher amounts on acquisitions, share buybacks, and dividends, thereby increasing the risk of weakening cash flow protection ratios necessary for the rating. The expected cost and incremental debt burden of the two announced acquisitions is manageable within the current
