Moody's Investors Service has assigned an A1 instrument rating to the proposed new senior unsecured notes that will be issued by Sabic Capital II BV and unconditionally and irrevocably guaranteed by Saudi Basic Industries Corporation (Sabic).

 

Concurrently, Moody's has affirmed Sabic's A1 long-term issuer rating and A1 senior unsecured ratings of Sabic Capital I BV and SABIC Capital II BV. The outlook on all ratings is stable.

 

"Sabic's A1 rating reflects its strong business position in the chemical sector and its ability to weather industry volatility, particularly given its healthy operational cash flows and conservative liquidity profile," said Rehan Akbar, a Moody's vice president - senior analyst.

 

RATINGS RATIONALE

Sabic's A1 issuer rating reflects its strong global position in the petrochemical and fertilizer markets that it has built up over the past four decades, as well as its competitive cost position, underpinned by significant economies of scale and access to competitively priced feedstock. These advantages help mitigate the volatility of its predominantly commodity-based petrochemical, fertilizer and steel activities, and significant fluctuations in supply and demand that affect its markets through industry and economic cycles. 

 

The rating also incorporates the high concentration of production assets in Saudi Arabia (A1 stable), where Sabic benefits from advantaged feedstock pricing. - TradeArabia News Service