S&P rates Formosa notes BBB+

Standard & Poor’s said it assigned a BBB+ long-term issue rating to a proposed issue of dollar-denominated senior unsecured notes by Formosa Group (Cayman) Ltd.

The agency also said it assigned a cnA+ long-term Greater China regional scale rating to the proposed notes.

The issue is guaranteed by the four core companies of the Formosa Plastics group: Formosa Plastics Corp., Nan Ya Plastics Corp., Formosa Chemicals & Fibre Corp. and Formosa Petrochemical Corp., which jointly own 100% of Formosa Group.

The long-term corporate credit ratings on the group’s core units have been equalized as at BBB+. Each guarantor has unconditionally and irrevocably guaranteed 25% of the payment obligations of the issuer under the notes, S&P said.

The equalization of the ratings on the notes with the ratings on the four core companies reflects a view that the guarantee is unconditional and irrevocable and therefore qualifies for shifting of the evaluation of the creditworthiness of the guarantor, rather than the issuer, the agency said.

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