Qatari Diar Finance Q.S.C. and 1MDB Energy Limited ratings also placed on review for downgrade
Madrid, March 08, 2016 -- Moody's Investors Service has placed on review for downgrade the
ratings of eight government-related issuers (GRIs) based in Gulf
Cooperation Council (GCC) countries. These issuers are:
Emirates Telecommunications Grp Co PJSC
Industries Qatar Q.S.C.
International Petroleum Investment Company
Mubadala Development Company
Qatar Petroleum
Saudi Basic Industries Corporation
Saudi Electricity Company
Saudi Telecom Company
Moody's also placed on review for downgrade the ratings of Qatari
Diar Finance Q.S.C. (QDF) and the ratings on the
notes issued by 1MDB Energy Limited (1MDBEL).
Today's actions follow the placement on review for downgrade of the sovereign
ratings of Saudi Arabia, Qatar, the United Arab Emirates and
the emirate of Abu Dhabi on 4 March 2016. For additional information,
please refer to the following announcements:
Saudi Arabia: https://www.moodys.com/research/--PR_344433
Qatar: https://www.moodys.com/research/--PR_344414
United Arab Emirates: https://www.moodys.com/research/--PR_344604
Emirate of Abu Dhabi: https://www.moodys.com/research/--PR_344602
Concurrently, the rating agency took no action on the ratings of
Abu Dhabi National Energy Company (TAQA, A3 stable), Qatar
Electricity and Water Company Q.S.C. (QEWC,
A1 stable) and Ooredoo Q.S.C. (A2 negative).
A complete list of affected companies and rating actions can be found
at the end of this press release.
RATINGS RATIONALE
RATIONALE FOR PLACING THE RATINGS OF EIGHT GCC-BASED GRIs ON REVIEW
FOR DOWNGRADE
Today's actions primarily reflect the existance of credit linkages
that the eight GRI's credit profiles have to their respective economies
and governments, given assumed financial support and dependence
as GRIs.
The reviews will assess the credit implications, on each of the
GRIs, of (1) the conclusion of the review for downgrade on the bond
ratings of their respective governments; (2) the governments'
support and dependence assumptions; and (3) the impact of a weakening
economic environment on their business profiles, given the potential
pressure of continued low oil prices on their Baseline Credit Assessments
(BCAs), where relevant.
Moody's will also factor into its reviews planned actions that the
respective governments could take to finance their budget deficits and
the consequential impact for the issuers.
RATIONALE FOR PLACING THE RATINGS OF QDF AND 1MDBEL ON REVIEW FOR DOWNGRADE
Moody's placed the ratings of QDF on review for downgrade in line
with the sovereign rating of Qatar because the government, acting
through the Ministry of Finance, unconditionally and irrevocably
guarantees the payments in respect of the bonds that QDF issued.
The rating agency also placed the rating on 1MDBEL's senior unsecured
notes on review for downgrade as a direct result of placing the ratings
of International Petroleum Investment Company (IPIC) on review for downgrade.
IPIC unconditionally and irrevocably guarantees the notes issued by 1MDBEL
on a joint and several basis along with 1Malaysia Development Berhad (unrated).
Moody's derives the ratings of the notes on the basis of the guarantee
provided by IPIC.
RATIONALE FOR TAKING NO ACTION ON TAQA, QEWC AND OOREDOO
Moody's decision to take no action on the ratings of TAQA,
QEWC and Ooredoo reflects the rating agency's opinion that their
respective issuer ratings can accommodate up to a one-notch downgrade
of their respective linked sovereign, based on their BCAs and their
support and dependence assumptions.
LIST OF AFFECTED RATINGS:
On Review for Downgrade:
..Issuer: Saudi Basic Industries Corporation
.... Issuer Rating (Foreign Currency),
Placed on Review for Downgrade, currently A1
.... Issuer Rating (Local Currency),
Placed on Review for Downgrade, currently A1
..Issuer: SABIC Capital I B.V.
....BACKED Senior Unsecured Regular Bond/Debenture,
Placed on Review for Downgrade, currently A1
..Issuer: SABIC Capital II B.V.
....BACKED Senior Unsecured Regular Bond/Debenture,
Placed on Review for Downgrade, currently A1
..Issuer: Saudi Electricity Company
.... Issuer Rating (Foreign Currency),
Placed on Review for Downgrade, currently A1
.... Issuer Rating (Local Currency),
Placed on Review for Downgrade, currently A1
..Issuer: Saudi Electricity Global SUKUK Company
....Senior Unsecured Regular Bond/Debenture,
Placed on Review for Downgrade, currently A1
..Issuer: Saudi Electricity Global SUKUK Company 2
....Senior Unsecured Regular Bond/Debenture,
Placed on Review for Downgrade, currently A1
..Issuer: Saudi Electricity Global SUKUK Company 3
....Senior Unsecured Regular Bond/Debenture,
Placed on Review for Downgrade, currently A1
..Issuer: Industries Qatar Q.S.C.
.... Issuer Rating (Local Currency),
Placed on Review for Downgrade, currently Aa3
..Issuer: Qatar Petroleum
.... Issuer Rating (Foreign Currency),
Placed on Review for Downgrade, currently Aa2
.... Issuer Rating (Local Currency),
Placed on Review for Downgrade, currently Aa2
..Issuer: Qatari Diar Finance Q.S.C.
.... Issuer Rating, Placed on Review
for Downgrade, currently Aa2
....BACKED Senior Unsecured Regular Bond/Debenture,
Placed on Review for Downgrade, currently Aa2
..Issuer: Saudi Telecom Company
.... Issuer Rating (Foreign Currency),
Placed on Review for Downgrade, currently A1
.... Issuer Rating (Local Currency),
Placed on Review for Downgrade, currently A1
..Issuer: Emirates Telecommunications Grp Co PJSC
.... Issuer Rating (Foreign Currency),
Placed on Review for Downgrade, currently Aa3
.... Issuer Rating (Local Currency),
Placed on Review for Downgrade, currently Aa3
....Senior Unsecured Medium-Term Note
Program, Placed on Review for Downgrade, currently (P)Aa3
....Senior Unsecured Regular Bond/Debenture,
Placed on Review for Downgrade, currently Aa3
..Issuer: International Petroleum Investment Company
.... Issuer Rating (Foreign Currency),
Placed on Review for Downgrade, currently Aa2
.... Issuer Rating (Local Currency),
Placed on Review for Downgrade, currently Aa2
..Issuer: IPIC GMTN Limited
....BACKED Senior Unsecured Medium-Term
Note Program, Placed on Review for Downgrade, currently (P)Aa2
....BACKED Senior Unsecured Regular Bond/Debenture,
Placed on Review for Downgrade, currently Aa2
..Issuer: 1MDB Energy Limited
....BACKED Senior Unsecured Regular Bond/Debenture,
Placed on Review for Downgrade, currently Aa2
..Issuer: Mubadala Development Company PJSC
.... Issuer Rating (Foreign Currency),
Placed on Review for Downgrade, currently Aa2
.... Issuer Rating (Local Currency),
Placed on Review for Downgrade, currently Aa2
..Issuer: MDC - GMTN B.V.
....BACKED Senior Unsecured Medium-Term
Note Program, Placed on Review for Downgrade, currently (P)Aa2
....BACKED Senior Unsecured Regular Bond/Debenture,
Placed on Review for Downgrade, currently Aa2
Outlook Actions:
..Issuer: Saudi Basic Industries Corporation
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: SABIC Capital I B.V.
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: SABIC Capital II B.V.
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Saudi Electricity Company
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Saudi Electricity Global SUKUK Company
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Saudi Electricity Global SUKUK Company 2
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Saudi Electricity Global SUKUK Company 3
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Industries Qatar Q.S.C.
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Qatar Petroleum
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Qatari Diar Finance Q.S.C.
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Saudi Telecom Company
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Emirates Telecommunications Grp Co PJSC
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: International Petroleum Investment Company
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: IPIC GMTN Limited
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: 1MDB Energy Limited
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Mubadala Development Company PJSC
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: MDC - GMTN B.V.
....Outlook, Changed To Rating Under
Review From Stable
The principal methodology used in rating Saudi Basic Industries Corporation,
SABIC Capital I B.V., SABIC Capital II B.V.
and Industries Qatar Q.S.C. was Global Chemical Industry
Rating Methodology published in December 2013. Other methodologies
used include the Government-Related Issuers methodology published
in October 2014.
The principal methodology used in rating International Petroleum Investment
Company, IPIC GMTN Limited, 1MDB Energy Limited, Mubadala
Development Company PJSC and MDC - GMTN B.V. was
Government-Related Issuers published in October 2014.
The principal methodology used in rating Qatar Petroleum was Global Integrated
Oil & Gas Industry published in April 2014. Other methodologies
used include the Government-Related Issuers methodology published
in October 2014.
The principal methodology used in rating Qatari Diar Finance Q.S.C.
was Sovereign Bond Ratings published in December 2015.
The principal methodology used in rating Saudi Telecom Company and Emirates
Telecommunications Grp Co PJSC was Global Telecommunications Industry
published in December 2010. Other methodologies used include the
Government-Related Issuers methodology published in October 2014.
The principal methodology used in rating Saudi Electricity Company,
Saudi Electricity Global SUKUK Company, Saudi Electricity Global
SUKUK Company 2 and Saudi Electricity Global SUKUK Company 3 was Regulated
Electric and Gas Utilities published in December 2013. Other methodologies
used include the Government-Related Issuers methodology published
in October 2014.
Please see the Ratings Methodologies page on www.moodys.com
for a copy of these methodologies.
The local market analyst for Saudi Basic Industries Corporation,
SABIC Capital I B.V., SABIC Capital II B.V.,
International Petroleum Investment Company, IPIC GMTN Limited,
1MDB Energy Limited, Mubadala Development Company PJSC and MDC -
GMTN B.V. ratings of is Rehan Akbar, AVP-Analyst,
Corporate Finance Group, Journalists 44 20 7772 5456, Subscribers
44 20 7772 5454.
The local market analyst for Qatar Petroleum, Qatari Diar Finance
Q.S.C., Saudi Electricity Company, Saudi
Electricity Global SUKUK Company, Saudi Electricity Global SUKUK
Company 2 and Saudi Electricity Global SUKUK Company 3 ratings of is Julien
Haddad, Analyst, Corporate Finance Group, Journalists
44 20 7772 5456, Subscribers 44 20 7772 5454.
The local market analyst for Emirates Telecommunications Grp Co PJSC ratings
of is Douglas Rowlings, Analyst, Corporate Finance Group,
Journalists 44 20 7772 5456, Subscribers 44 20 7772 5454.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the credit rating action on the support provider and in relation to
each particular credit rating action for securities that derive their
credit ratings from the support provider's credit rating.
For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and
in relation to a definitive rating that may be assigned subsequent to
the final issuance of the debt, in each case where the transaction
structure and terms have not changed prior to the assignment of the definitive
rating in a manner that would have affected the rating. For further
information please see the ratings tab on the issuer/entity page for the
respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
The relevant office for each rating is identified in "Debt/deal
box" on the Ratings tab in the Debt/Deal List section of each issuer/entity
page of the Website.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the
lead analyst and the Moody's legal entity that has issued the ratings.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Ivan Palacios
VP - Senior Credit Officer
Corporate Finance Group
Moody's Investors Service Espana, S.A.
Calle Principe de Vergara, 131, 6 Planta
Madrid 28002
Spain
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
David G. Staples
MD - Corporate Finance
Corporate Finance Group
Telephone: 00971 4237 9536
Releasing Office:
Moody's Investors Service Espana, S.A.
Calle Principe de Vergara, 131, 6 Planta
Madrid 28002
Spain
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Moody's places on review for downgrade 8 government-related issuers in GCC countries