Lyondell Chemical

Lyondell Chemical is a US-based chemicals company with approximately $19.4 billion in outstanding debt. The firm filed for chapter 11 bankruptcy on 7 January. It is the US operating arm of LyondellBasell Industries, the parent company, which has not been implicated by Lyondell Chemical's bankruptcy (as of February 2009).

The company was formed through the merger of Arco Chemical and Lyondell Petrochemical in July 1998, and subsequently acquired Millennium Chemicals in November 2004 (with which it had a joint venture in December 1997, Equistar Chemicals). It acquired its joint venture (as Lyondell Petrochemical) with Citgo - Lyondell-Citgo Refining, started in July 1993 - in August 2006. The company of multiple acquisitions that is Lyondell Chemical was then acquired by Basell Polyolefins in December 2007, forming LyondellBasell Industries.

Lyondell Chemical's bankruptcy triggered a credit event under its credit default swaps contracts as well as those CDS referencing loans. Credit settlement auctions on 3 February 2009 determined the final price for Lyondell's CDS at 15.5 points. Its loan CDS wassettled at 20.75 points. Net open interest on CDS was $143 millionto sell, and on LCDS was $138 million to sell.