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Covestro is a vertically integrated polyurethane and polycarbonate leader, consisting of polyurethane, polycarbonate and coatings production assets spun-off from European major chemical producer Bayer. Polyurethanes segment produces toluene diisocyanate (TDI), diphenylmethane diisocyanate (MDI) and polyether polyols. MDI or TDI are combined with polyether polyols and sold to customers to make rigid or flexible polyurethane foams. TDI-based foams are valued for their flexibility property, while MDI-based foams are valued for insulation although in reality these distinctions are less than absolute. Polycarbonates segment develops and produces polycarbonate resins, which are lightweight, malleable and resilient plastics used in the manufacture of electronics, vehicle components, buildings, medical equipment and data storage applications. Over recent years, the business has captured a tailwind from a trend towards lighter weight component requirements in the automotive and electronics sectors. Covestro's Coatings, Adhesives and Specialties (CAS) segment primary product categories encompass aliphatic isocyanates (HDI and IPDI derived resins), aromatic isocyanates (MDI and TDI derived resins), as well as more specialized products such as polyurethane dispersions, films and elastomers. (21 Sep 2018)

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November 2018 Europe Company Recommendation Change

Euro Recommendation Changes: 02 Dec 2018, 9:51 PM ET - Our monthly report provides executive summaries for the twenty-two companies recommendation changes made on European companies during the month of November.

Covestro: Cuts Guidance for FY18; Shift to M/P

Worth Watching: 21 Nov 2018, 8:58 PM ET - Covestro has downgraded its guidance for FY18, citing stronger competition, adverse impact of the low Rhine water levels, efficiency program provisions, unfavourable working capital moves and higher investments. Specifically, guidance for core ..

Covestro 3Q18: Remain Positive Despite Headwinds

Earnings Note: 25 Oct 2018, 7:45 PM ET - We continue to like the credit and see potential for a meaningful upside in the medium-term; in the near-term the company is facing several headwinds in terms of input costs and pricing pressure. 

Air Liquide: 3Q18 Revenue Update

Worth Watching: 25 Oct 2018, 8:25 AM ET - Air Liquide (A3/A-) had released its 3Q18 revenues update on Wednesday, October 24. Reported sales were up 6.6% YoY at €5.27 bn while comparable sales were up 6.0% YoY after accounting for a negative currency impact (-1.2%) on the back of a stro ..

LIN/PX Merger: Conditional Approval from the FTC

Worth Watching: 22 Oct 2018, 10:22 PM ET - LIN/PX Merger Update: The FTC has granted a conditional approval for the Linde/Praxair merger subject to further asset divestitures. In addition to the assets Linde had already agreed to divest in July 2018, the FTC requires the sale of furthe ..

Euro IG Sector Snapshots: October 2018

Sector Analysis: 22 Oct 2018, 9:31 PM ET - Our updated one page snapshots of the Euro IG sectors.

COVEGR 2Q18: Another Solid Quarter/Guidance Update

Earnings Note: 26 Jul 2018, 9:55 PM ET - Covestro reported another solid quarter, supported by healthy volumes growth and notable increases in pricing across most regions and end-markets. 

Italy Assessing the Risks: Part 2 - Non-Financials

Sector Analysis: 31 May 2018, 10:24 PM ET - In the second part of our series on the impact of Italian political uncertainty on the country's investment grade and high yield credits we take a look at non-financial corporates.

Covestro 1Q18: TDI Remains Strong

Earnings Note: 29 Apr 2018, 10:06 PM ET - Oncoming polyurethane capacity will drain some of the margin tailwind, but demand held up through 1Q18 and kept utilization rates at high levels.

Basic Industries: 1Q18 In Review and a Look Ahead

Sector Analysis: 17 Apr 2018, 4:12 AM ET - We review the performance of the Basic Industries sector  YTD, comparing themes in our outlook with actual developments. We also talk about unexpected developments, and what we think will shape the balance of the year. 

Bayer: EC Approves Monsanto Deal, DOJ Remains

Worth Watching: 22 Mar 2018, 10:07 PM ET - Bayer 's (A3/A-) $66 bn acquisition of Monsanto (A3/BBB) was conditionally approved by the European Commission on Wednesday. The regulator's concerns surrounding competition and innovation following the merger seem to have been successfully addr ..

Covestro 4Q17: TDI Boost Leads to Record Year

Earnings Note: 26 Feb 2018, 10:55 PM ET - Covestro delivered excellent 4Q17 results to culminate what has been a banner year for the company. Market fundamentals look set to remain favorable for Covestro in 2018, though TDI conditions should begin to normalize towards 2H18. 

Chemicals Outlook 2018 (Part 6): Petrochemicals

Sector Outlook: 01 Feb 2018, 4:07 AM ET - A significant amount of ethylene derivative capacity is expected to continue to come online throughout 2018, pressuring prices and margins. Companies will attempt to counter the incoming capacity headwinds with rising plant utilization.

Chemicals 2018 Outlook (Part 5): Chlor-Alkali

Sector Outlook: 25 Jan 2018, 10:35 PM ET - With investment in chlor-alkali capacity effectively non-existent and positive manufacturing and construction trends around the globe, we expect operating rates around the world to rise in the medium term. 

Chemicals 2018 Outlook (Part 3): Industrial Gases

Sector Outlook: 21 Jan 2018, 10:14 PM ET - Improving PMI trends not only in North America, but also globally, bode well for Industrial Gas demand in 2018 and will perhaps help mark an end to the protracted period of decline in gas project backlogs.

Chemicals 2018 Outlook (Part 2): The Majors

Sector Outlook: 18 Jan 2018, 10:53 PM ET - M&A is still key within the Majors names as DWDP begins to deliver its promised synergies, Bayer looks to close the Monsanto deal, and BASF continues to opportunistically pick up assets, while riding momentum from its Chemical Segment.

Chemicals 2018 Outlook (Part 1): Specialty Chems

Sector Outlook: 17 Jan 2018, 11:12 PM ET - M&A is likely to play a large role for Specialty Chem names in 2018 as they seek exposure to higher margin products and emerging markets while rising raw materials costs may make it tricky for margins to navigate the year unscathed.

Bayer 3Q17: Monsanto Progresses, Brazil Stabilizes

Earnings Note: 30 Oct 2017, 7:20 PM ET - Bayer had an eventful quarter despite significant FX headwinds, completing a number of strategic steps as it looks to close the Monsanto transaction in 1H18.

Covestro 3Q17: Polyurethanes Push Performance

Earnings Note: 24 Oct 2017, 11:48 PM ET - Covestro's strong 3Q17 performance picked up right where it left off in 1H17, as the firm continues to see top line and EBITDA expansion as demand remains robust in Covestro's main end markets. 

Bayer: Sells 6.9% Covestro Stake for €1 bn

Worth Watching: 01 Oct 2017, 11:43 PM ET - Bayer (A3/A-) has sold an additional 6.9% of its Covestro (Baa2/NR) stake for €1 bn. Bayer has been steadily reducing its Covestro stake while looking to meet management's goal of achieving full separation with the company in the medium term, h ..

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