Fitch affirms Sabic

Fitch Ratings said it affirmed the issuer default rating of Saudi Basic Industries Corp. (Sabic) at A and short-term rating at F1 with stable outlook. Fitch also affirmed the issuer default rating of Sabic Europe BV at A and short-term rating at F1 and changed the outlook on the issuer default rating to negative from stable. Its senior unsecured rating also is affirmed at A.

The rating action follows news that Sabic is acquiring the plastics business of General Electric of the United States for a total consideration of $11.6 billion.

The negative outlook on Sabic Europe indicates a potential downward adjustment of the rating due to the risk of dilution of the available parental support in the light of this sizeable acquisition, the agency said. The ratings of Sabic Europe continue to reflect assumed support from parent company Sabic, based on strong commercial integration and its high strategic importance for its parent, Fitch added.

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