Moody's Investors Service raised Westlake Chemical Corp.'s credit rating to investment grade, partly because of its improving profits and the likelihood that it will be able to maintain a large cash balance.
The ratings agency lifted the company's senior unsecured rating to "Baa3" from a "junk"-level "Ba1." The change affects $750 million in debt.
While Westlake has some construction projects planned through 2014, Moody's still expects the company to have more than $500 million in cash on its balance sheet once the projects are done.
Last month Westlake, based in Houston, reported that its second-quarter net income surged 42 percent, mostly because of higher prices.
The Houston company's outlook is stable.
Shares of Westlake Chemical gained $2.06, or 5.5 percent, to $39.60 in afternoon trading. The stock is down 42 percent from a 52-week peak of $67.77 in April.
