Arkema's operating performance over the first nine months of 2016 exceeded our expectations on the back of a higher share of specialty chemicals-type businesses, development and ahead-of-schedule realization of synergies of the Bostik acquisition, cost optimization, and raw material tailwinds. We forecast that Arkema's ratio of adjusted funds from operations (FFO) to debt will improve to 35% in 2016, and we forecast further improvement of the company's credit metrics in 2017 and 2018 on the back of expected strong free operating cash flow (FOCF). We are revising our outlook to stable from negative and affirming our 'BBB/A-2' ratings on Arkema. The stable outlook reflects our forecast that Arkema will report a ratio of adjusted FFO to debt of about 35%
