“This excellent result is a clear reflection of SABIC IP’s industry leadership, improved operational performance and also shows that the company is moving from strength to strength,” a company press release said on Tuesday. Over the last year, SIP’s credit metrics have improved in a sustained manner, reflecting the strong underlying fundamentals of the business and the success of well thought out cost rationalization.
The ratings of SIP’s bank debt and notes have also been upgraded to BBB- and BB+ respectively, reflecting increased confidence in SIP to repay its debt obligations on an ongoing basis with a stronger capital structure.
Explaining the rationale behind the upgrade, S&P says that it reflects the material strengthening in SABIC IP’s credit profile following further substantial parent financial support in the first half of 2010, as well as the much stronger than expected recovery in profitability.
This show of strength is a good reflection of SABIC’s own robust and very strong financial strength. In fact, SABIC maintains the strongest ratings of A+ (Stable) in the global chemical industry.
“The confidence of the rating agency reflects the wisdom of SABIC’s acquisition of IP which took place in 2007. Overall, it can be concluded that SABIC IP has a bright future and is likely to do even better in the future with the recovery of the global economy,” the statement added.
