Royal Bank of Scotland PLC may face losses on its $3.47 billion of loans to the bankrupt Lyondell Chemical Co.

The Edinburgh lender inherited the loans last year by purchasing ABN Amro Holding NV's investment bank, which had extended $1.6 billion of lower-ranked credit to Lyondell.

The Dutch banking company is listed as Lyondell's largest secured creditor, according to documents filed in the U.S. Bankruptcy Court for the Southern District of New York. The loans are part of the $20.5 billion of funds raised to finance Basell AF's purchase of Lyondell, creating the Rotterdam company LyondellBasell Industries AF in 2007.

Citigroup Inc., one of the five banking companies that financed the merger, said last week that it would take a $1.4 billion loss on its $2 billion of Lyondell loans. ABN Amro, Citi, UBS AG of Zurich, and an Apollo Management LP unit are listed as creditors to Lyondell Chemical, which filed for bankruptcy protection Jan. 6.

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