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The Dow Chemical Company (NYSE: DOW) has already announced $1.5B of debt reduction in Q1… how about that dividend? While I support these deleveraging moves 100%, I think we are at the stage where investors should be given some more firm dividend guidance. I know DOW was burned once before making such statements but saying “we are reviewing the dividend for a hike in 2011″ is a long way from “I will never cut the dividend”. There is a nice middle of the road here, it does not have to be all or nothing.

The company announced that it is launching a cash tender offer for $750 MM of high coupon debt.

This is the third in a series of debt reduction activities announced in the first quarter of 2011. In addition to this cash tender offer, Dow will also pay off $800 MM of matured debt, and more than $150MM of InterNotes (medium-term retail bonds). Collectively, these actions will enable the Company to reduce its overall debt by >$1.5B.

These actions will be accretive to shareholders in Q2 2011 and will together deliver a structural reduction in Dow’s interest expense (~ $120MM – $130MM in annual pre-tax savings).

Dow remains on track to achieve a net debt to capitalization ratio of below 40% by the end of the 2012.

Disclosure: Long DOW

Source: Dow Chemical: Investors Deserve Firm Dividend Guidance