Fitch rates Sibur bonds BB+

Fitch Ratings said it assigned a local-currency senior unsecured rating of BB+ to Sibur Holding’s recent issue of RUB 10 billion 10-year ruble bonds.

Fitch also said it affirmed Sibur’s long-term issuer default rating at BB+ with negative outlook, short-term foreign-currency issuer default rating at B and Sibur Securities Ltd.’s five-year $1 billion guaranteed eurobonds due 2018 at BB+.

Sibur’s $1 billion eurobonds due 2018 and new RUB 10 billion ruble bonds rank pari passu with the group’s senior unsecured debt and are only structurally subordinated to Sibur’s debt at its subsidiaries, largely represented by debt at Tobolsk Polymer and ZapSibNefteKhim (ZapSib-2), the agency said.

The company’s structurally senior debt is expected to increase with further utilization of ZapSib-2 project debt funding, but remain well below 2x to 2.5x threshold of prior-ranking debt-to-EBITDA for notching unsecured debt rating until the bonds mature.

The ratings are constrained by higher-than-average systemic risks associated with the Russian business and jurisdictional environment, Fitch added.

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