S&P rates Equisar notes A-

Standard & Poor's said it assigned a preliminary A- credit rating to proposed notes due 2026 issued by Equisar International Inc. The proposed issuance will comprise $302 million of class A guaranteed and secured accreting notes due 2026, $348 million of class B guaranteed and secured amortizing notes due 2026 and $150 million of class B2 guaranteed and secured notes due 2026.

The rating on the notes are equalized with the issuer credit rating on the state of Sarawak (A-/stable; axAA), its ultimate owner, the agency said.

The proposed notes rating is equalized with that on the state's to reflect S&P's view on the state's willingness to treat this obligation pari passu with its direct debt, the agency added.

The rating on the proposed notes also reflects the view that the state's willingness to support full and timely repayment to noteholders mitigates the weaknesses stemming from the lack of direct state guarantee on the payment of the notes and Equisar not fully meeting the terms of bankruptcy remoteness under S&P's criteria, the agency noted.

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