S&P ups Sabic from junk

Standard & Poor's said it raised to BBB- from BB the long-term corporate credit rating on Sabic Innovative Plastics Holding BV, 100%-owned subsidiary of Saudi chemical group Sabic.

The outlook is stable.

The agency also raised the issue ratings on the secured bank term loans to BBB- from BB, and affirmed the BBB- issue rating on the secured asset backed revolving facility.

The unsecured bond were raised to BB+ from B+ because of its subordinated nature in comparison with the significant amount of secured debt.

"The upgrade reflects the material strengthening in Sabic IP's credit profile following further substantial parent financial support in the first half of 2010, as well as the much stronger than expected recovery in profitability," S&P analyst Karl Nietvelt said in a statement.

Sabic IP's reported external net financial debt fell materially in the first half of 2010, thanks to subordinated loans and capital injections provided by its parent, Saudi Basic Industries Corp. (A+/stable/A-1), according to the agency.

This, together with strong improvements in Sabic IP's operational performance, has resulted in an adjusted debt-to-EBITDA ratio falling to less than 5x at end-June 2010.

S&P raised the group's standalone credit profile to a level consistent with B+ from CCC+.

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