Fitch rates Sabic bonds A+

Fitch Ratings said it assigned an expected senior unsecured A+ rating to Sabic Capital II BV's proposed $1 billion 2 5/8% guaranteed bonds.

The rating is in line with Saudi Basic Industries Corp.'s (Sabic) senior unsecured A+ rating, Fitch said.

The bonds will benefit from a direct, unconditional, general and irrevocable guarantee from Sabic, the guarantor, the agency said. The guarantee will be a senior unsecured obligation of Sabic and will rank at least pari passu with all its existing and future senior unsecured and unsubordinated obligations, Fitch said.

Sabic Capital II is an indirect wholly owned subsidiary of Sabic. The company was set up as a finance and investment vehicle of the group, the agency said.

The funds it borrows are on-lent to companies of the Sabic Group in the United States and it relies on the financial support of Sabic, Fitch said.

The guarantee will be structurally subordinated to the claims of the creditors of Sabic and its subsidiaries. Fitch said the risk of structural subordination is strongly mitigated by an expectation that the group's consolidated FFO adjusted net leverage will remain below 1.0x over the rating horizon.

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