Saudi Aramco is in talks with ratings agencies aimed at getting its own debt ranking
Abu Dhabi’s government-owned oil giant was assigned the region’s highest credit rating as the company pursues international investors and seeks to raise new funds from its businesses.
Fitch Ratings gave Abu Dhabi National Oil Co. an AA long-term credit rating, it said in a statement. Saudi Aramco, the world’s biggest oil company, plans to sell about $10 billion in bonds this year and is in talks with ratings agencies aimed at getting its own debt ranking.
Adnoc said in a separate statement it has no plans to issue a bond at the group level.
• Adnoc’s long-term rating is Fitch’s third-highest and is in line with the rankings for debt issued by the governments of Abu Dhabi and of Kuwait. Saudi Arabia, the biggest member of OPEC and world’s largest crude exporter, is rated two notches lower at A+.
• Fitch said Adnoc accounted for more than 50% of the Abu Dhabi’s “budget revenue and current external receipts” in 2016-2017.
• The ratings firm was told by management that “there has been no pressure from the state historically to increase dividends. However, we believe there is no legal mechanism that would prevent the state” from demanding higher pay-outs.”
• “Profitability is in line with that of international oil majors and exceeds that of some national oil companies,” and is comparable to Total SA and Royal Dutch Shell Plc, Fitch said.
Exxon Mobil Corp. has higher equivalent credit ratings from Moody’s and Standard & Poor’s than Adnoc, while Fitch doesn’t rate the U.S. producer.
• Fitch previously ranked the $3 billion in bonds secured by Adnoc’s crude pipeline at AA.
• Bank of America Merrill Lynch and Citigroup advised Adnoc on the Fitch rating.
• Fitch also gave the company an AA+ standalone ranking, which doesn’t take into account any external support when considering a company’s debt.