Dow Chemical 2011 Annual Report Download - page 90

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On November 14, 2011, the Company issued $2.0 billion of debt securities in a public offering. The offering included
$1.25 billion aggregate principal amount of 4.125 percent notes due 2021 and $750 million aggregate principal amount of
5.25 percent notes due 2041.
During 2011, the Company issued $436 million of InterNotes with varying maturities in 2016, 2018 and 2021, at various
interest rates averaging 3.71 percent; and approximately $1.2 billion of long-term debt was entered into by consolidated
variable interest entities, including the refinancing of short-term notes payable.
On September 8, 2010, the Company concluded a tender offer for any and all of $145 million of debentures acquired from
Rohm and Haas, due June 2020. As a result of the tender offer, the Company redeemed $123 million of the debentures and
recognized a $46 million pretax loss on this early extinguishment, included in “Sundry income (expense) – net” in the
consolidated statements of income and reflected in Corporate.
On November 4, 2010, the Company issued $2.5 billion of debt securities in a public offering. The offering included
$750 million aggregate principal amount of 2.50 percent notes due 2016 and $1.75 billion aggregate principal amount of
4.25 percent notes due 2020.
During 2010, the Company issued $537 million of InterNotes with varying maturities in 2015, 2017 and 2020, at various
interest rates averaging 4.70 percent.
On June 4, 2009, the preferred partner of Tornado Finance V.O.F., a consolidated foreign subsidiary of the Company,
notified Tornado Finance V.O.F. that the preferred partnership units would be redeemed in full on July 9, 2009 as permitted by
the terms of the partnership agreement. On July 9, 2009, the preferred partnership units and accrued dividends were redeemed
for a total of $520 million. See Note U to the Consolidated Financial Statements for additional information.
On August 21, 2009, the Company executed a buy-back of Euro 175 million of private placement debt acquired from
Rohm and Haas and recognized a $56 million pretax loss on early extinguishment, included in “Sundry income (expense) –
net” in the consolidated statements of income and reflected in Corporate.
On September 28, 2009, Calvin Capital LLC, a wholly owned subsidiary of the Company, repaid a $674 million note
payable, which was issued in September 2008.
During 2009, the Company issued $640 million in InterNotes with varying maturities in 2014, 2016 and 2019, at various
interest rates averaging 6.45 percent.
On February 7, 2012, the Company notified bondholders of its intention to redeem $1.25 billion, 4.85 percent notes with
an original maturity date of August 15, 2012, at the applicable make-whole redemption price plus accrued and unpaid interest
through the date of redemption. The full amount is expected to be redeemed on March 8, 2012.
Dow’s public debt instruments and documents for its private funding transactions contain, among other provisions, certain
covenants and default provisions. The Company’s most significant debt covenant with regard to its financial position is the
obligation to maintain the ratio of the Company’s consolidated indebtedness to consolidated capitalization at no greater than
0.65 to 1.00 at any time the aggregate outstanding amount of loans under the Revolving Credit Facility exceeds $500 million.
The ratio of the Company’s consolidated indebtedness to consolidated capitalization as defined in the credit agreements was
0.46 to 1.00 at December 31, 2011. At December 31, 2011, management believes the Company was in compliance with all of
its covenants and default provisions. For information on Dow’s covenants and default provisions, see Note P to the
Consolidated Financial Statements.
The Company’s credit rating is investment grade. The Company’s long-term credit ratings are BBB with a stable outlook
(Standard & Poor’s), Baa3 with a positive outlook (Moody’s) and BBB with a stable outlook (Fitch). In the second quarter of
2011, Standard & Poor’s upgraded the Company’s long-term credit rating from BBB- to BBB, the Company's short-term credit
rating from A-3 to A-2, and changed the outlook from positive to stable. Also in the second quarter of 2011, Moody’s upgraded
the Company’s outlook from stable to positive. The Company’s short-term credit ratings are A-2 (Standard & Poor’s), P-3
(Moody’s) and F2 (Fitch). If the Company’s credit ratings are downgraded, borrowing costs will increase on certain indentures,
and it could have a negative impact on the Company’s ability to access credit markets.