Fitch has confirmed Sibur’s rating at BB+, forecast “stable”

Fitch Ratings has confirmed the long-term issuer default rating of Sibur Holding PJSC (oil chemicals group based in Russia) at BB+, forecast stable. Fitch has also confirmed the short-term issuer default rating at B level and ratings o guaranteed 5-year bonds SIBUR Securities Limited for $1 bln with the settlement in 2018 at BB+.

The confirmation of the rating and a “stable” forecast take into account the ability of Sibur to overcome the recent difficulties in the market, e.g. oil price fall beginning from the end of 2014 and recalculation of obligations in foreign currency due to a weaker rouble that is reflected in the net corrected leverage by monetary funds from operations at 2.4x in 2014. Though this rate is higher than the mid-term reference point of the agency to lower the rating to 2.0x, we expect this rise to be temporary and possible for the current level of the rating. The key factors determining the financial flexibility of Sibur include the rising export competitiveness as a result of a weak rouble, flexibility in respect of investment into the already started project ZapSib-2 and a strong EBITDA margin due to the low base of expenditure.