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Fitch lowers SABIC's rating after Saudi Arabia downgrade, drone attack

Fitch Ratings on Oct. 7 lowered the long-term issuer default rating of Saudi Basic Industries Corp., or SABIC, to A from A+, mirroring the sovereign ratings downgrade on Saudi Arabia following the missile and drone attack on the country's oil facilities in September.

The rating agency said the attack temporarily halted nearly half of SABIC's feed-stock supply to Saudi Arabian Oil Co., which has since been restored in full.

The incident would have a "very limited" impact on SABIC's operational and financial performance in 2019, according to Fitch.

"We expect the attack to have a low single digit impact on its full-year production, with an even smaller effect on sales due to the inventory sales partly backing up the interrupted production," the rating agency said.

Fitch said the outlook on SABIC's long-term rating is stable. The company's short-term issuer default rating, however, was upgraded to F1+ from F1, in line with the rating agency's latest short-term ratings criteria.