S&P revises Sasol view to negative

S&P said it revised its outlook on Sasol Ltd. to negative from stable and affirmed its BBB long-term and A-2 short-term foreign currency corporate credit ratings.

In addition, the agency affirmed its BBB issue rating on Sasol's senior unsecured notes maturing in 2022, which were issued by Sasol Financing International Ltd. and are unconditionally guaranteed by Sasol.

S&P said the outlook revision reflects its view of at least one-in-three likelihood that Sasol's operating performance will be hampered by stronger-than-expected South African rand (ZAR) exchange rate and, in turn, lead to credit metrics below expectations for the current rating.

Despite Sasol's sound progress in efficiency and capital preservation initiatives, a $2.1 billion cost overrun at the Lake Charles cracker project, alongside low oil prices and a potentially stronger-than-expected rand exchange rate, may result in weak credit metrics over the coming two years, the agency added.

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