Fitch rates Sabic bond A

Fitch Ratings said it assigned an expected A rating to Sabic Europe BV's proposed benchmark eurobond and affirmed the A issuer default ratings and F1 short-term ratings of Sabic Europe and of its Saudi Arabia-based parent company, Saudi Basic Industries Corp. (Sabic).

The outlook is stable.

The proceeds of the bonds will be used to refinance a €1.125 billion loan-note due at the end of the year and to support Sabic Europe's capital expenditure program. The proceeds will also be available for general corporate purposes.

The bonds will constitute direct, unconditional and senior unsecured obligations of Sabic Europe, and the agency said the A rating is strongly reliant on assumed support from Sabic. While there is no restriction on additional debt, the bonds benefit from a negative pledge regarding secured "relevant indebtedness" at the level of the issuer or at any of its material subsidiaries, and such debt can be in the form of or be represented by bonds, notes, debentures, loan stock or other securities, which are or which can be listed or traded on any stock exchange, over-the-counter or other securities markets.

Bondholders will have the possibility to put the bond to the issuer if Sabic ceases to hold at least 50% of the share capital in Sabic Europe, Fitch noted.

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