IPIC GMTN, a unit of Abu Dhabi government-owned International Petroleum Investment Co, received AA long-term senior unsecured debt ratings for its $1bn of five-year and $1.5bn of ten-year bonds by Standard & Poor’s, the third-highest investment grade.
Payment of amounts due on the notes is “unconditionally and irrevocably guaranteed” by International Petroleum, also known as IPIC, the ratings firm said on Thursday in an e-mailed statement.
“Although the government does not formally guarantee IPIC’s liabilities, we equalise the ratings on IPIC with those on the government of Abu Dhabi,” analyst Kai Stukenbrock wrote. “Accordingly, we consider that extraordinary government support in times of financial stress is ‘almost certain’.”
A $1bn portion of five-year notes may yield 195 basis points more than similar-maturity US Treasuries, and $1.5bn of ten-year notes may pay a spread of 245 basis points, a person familiar with the transaction said November 9.
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