01 August 2012 7:14am

Caltex launched a A$300 million subordinated note issue yesterday, after flagging the issue last week when it announced its supply chain restructuring and the closure of its Kurnell refinery.

The proceeds raised from the issue will be used to cover at least some of the costs associated with the restructuring. However, the "equity credit" that Standard & Poor’s is expected to give these notes may not be enough for Caltex to avoid a rating downgrade to BBB, from BBB+.

S&P placed the BBB+ rating assigned to Caltex on credit watch, with negative implications, when the...