S&P gives BBB+ to GS Caltex notes

S&P said it assigned its BBB+ long-term issue rating to the U.S. dollar-denominated senior unsecured notes that GS Caltex Corp. (BBB+/stable/A-2) issued.

The notes mature in 2024. The company plans to use the proceeds for general corporate purposes, including repayment of outstanding borrowings.

“We rate GS Caltex's senior unsecured notes the same as the issuer credit rating on the company because the issuer has low leverage, which limits the risk of subordination for lenders of unsecured debt,” S&P said in a news release.

“The issuer credit rating on GS Caltex reflects the company's integrated business portfolio with high operating efficiency. This strength should result in decent operating cash flows, despite the likelihood of a volatile oil refining and petrochemical market,” S&P said.

“Although we expect an increase in GS Caltex's capital expenditure for a new petrochemical project, the company's adjusted debt-to-EBITDA ratio is likely to stay below 1.5x over the next two years.”

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