Moody's may downgrade Sabic Innovative

Moody's Investors Services said it placed Sabic Innovative Plastics Holding BV's Ba2 corporate family and probability-of-default ratings, B1 (LGD6, 92%) $1.5 billion senior unsecured notes and Ba2 (LGD3, 41%) senior secured bank facilities under review for possible downgrade following the announcement of the company's third-quarter results.

In the third quarter, Sabic's operating performance was significantly impacted by raw materials and energy cost inflation, declining sales volumes reflecting persistent weakness in some of its end markets and some price erosion despite the price increases implemented in the early summer.

As a result, and given the expectation that trading conditions in Sabic's markets are likely to remain challenging in the near term despite the correction in benzene prices witnessed during the second half of 2007, Moody's anticipates that the group's full-year EBITDA will materially fall short of its initial expectations.

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