On Feb. 12, 2009, Standard&Poor's Ratings Services lowered its long- and short-term corporate credit ratings on Germany-based chemicals producer BASF SE to 'A+/A-1' from 'AA-/A-1+'. The outlook is negative. The rating action reflects the currently weak market conditions for chemical companies and our expectations that BASF's balance sheet will weaken, owing to a combination of lower operating results, the acquisition of Ciba Holding Inc. (BBB-/Watch Pos/A-3), sizable capital expenditures, and its likely continuously shareholder-friendly financial policy. BASF has significantly reduced its financial flexibility over the past few years as a result of acquisitions and sizable shareholder returns. This has negatively affected credit quality. We have also lowered our classification of BASF's business risk to strong from excellent, reflecting
