Moody's assigns (P)A1 rating to Sabic Capital I B.V.'s guaranteed bonds

The bonds will be unconditionally and irrevocably guaranteed by Sabic. The outlook for the rating is positive.

The proposed bonds are to be issued under a par for par exchange of Sabic Europe's existing EUR750m 4.5% bonds due 2013. In line with Sabic's corporate strategy to gradually centralise the funding of the group at the parent level, this exchange offer provides concrete evidence of Sabic's commitment towards its operating subsidiaries and also further reduces the debt complexity of the group.

Sabic's A1 ratings reflect the group's strong global positions in the petrochemicals and fertiliser markets as well as its highly competitive cost position underpinned by substantial scale benefits and access to significantly cost-advantaged feedstock sourced from 100% government-owned Saudi Aramco, which help mitigate its exposure to predominantly commodity-like cyclical activities.

The outlook for Sabic's A1 ratings is positive. This reflects the upgrade of the Kingdom of Saudi Arabia's sovereign rating to A1 with a positive outlook on 24 July 2007 and Moody's expectation that the current assumptions for support and dependence are unlikely to change in the foreseeable future. Accordingly, Sabic's ratings are closely tied to those of the sovereign and are likely to move in tandem with them.

Headquartered in Riyadh, Saudi Arabia, Sabic is a diversified industrial conglomerate that is 70%-owned by the Kingdom of Saudi Arabia and principally active in petrochemicals, fertilisers and metals with consolidated revenues of SR126bn in 2007.