Moody’s shifts Equate view to negative

Moody’s Investors Service said it changed the outlook for Equate Petrochemical Co. KSCC to negative from stable.

Moody’s decision to change the outlook to negative from stable reflects the weak product price environment that has led to a significant deterioration in average ethylene glycol and polyethylene prices, which in 2019 fell year-over-year by 36% and 20% respectively.

The supply and demand imbalance in the market for ethylene derivatives, especially ethylene glycol, is likely to weigh on product price recovery this year and potentially well into 2021, exposing the company’s leverage to further downside risks, the agency said.

Moody’s also affirmed the Baa2 ratings on Equate, its outstanding unsecured bonds and sukuk instruments.

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