Moody’s rates Sinopec notes Aa3

Moody’s Investor Service said it assigned an Aa3 senior unsecured rating to the proposed notes to be issued by Sinopec Group Overseas Development (2015) Ltd. and guaranteed by China Petrochemical Corp. (Sinopec Group).

The proceeds will be used to refinance existing indebtedness and for general corporate purposes of its overseas businesses, Moody’s said.

The agency also said it affirmed the Aa3 issuer ratings of Sinopec Group and its key listed subsidiary, China Petroleum and Chemical Corp. (Sinopec Corp).

Moody’s also affirmed the Aa3 rating on the senior unsecured bonds issued by Sinopec Group Overseas Development (2012) Ltd., Sinopec Group Overseas Development (2013) Ltd. and Sinopec Group Overseas Development (2014) Ltd. These issuances are guaranteed by Sinopec Group.

The agency also affirmed the Aa3 ratings on the senior unsecured bonds issued by Sinopec Capital (2013) Ltd. and guaranteed by Sinopec Corp.

The outlook remains stable.

Moody’s also said it affirmed the prime-1 rating for the commercial-paper program launched by Sinopec Century Bright Capital Investment Ltd. and guaranteed by Sinopec Group.

While the lower oil price will result in a big drop in Sinopec Group and Sinopec Corp.’s profits and weaker credit metrics, both companies’ good business diversity, conservative capital spending and strong access to liquidity will help preserve their financial profile and enable them to maintain credit metrics appropriate for their Aa3 ratings, Moody’s said.

The ratings also consider the extraordinary support that the Chinese government is likely to provide in the event of need, the agency added.

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