KIEV, March 30 - Moody's Investors Service upgraded to B3 from Caa1 the corporate family rating of Stirol, a major chemical group, and the senior unsecured rating of the loan participation notes issued by UkrChem Capital BV with a sole purpose of providing financing to Stirol.

The outlook on both ratings is negative, Moody's said in a press release.

The negative outlook on the ratings reflects the pressure from a volatile fertilizer market with rising feedstock prices on Stirol's margins given the threat from low-cost producers (from South America and India), which have access to cheap raw materials and are building new capacity, and the risk of profits extraction as a majority of sales are conducted through a trading entity which is only 51% owned by Stirol.