Fitch Ratings has affirmed Saudi Electricity Company’s (SEC) long-term issuer default rating (IDR) and senior unsecured rating at AA-. The outlook on the long-term IDR is stable.
Fitch has also affirmed SEC’s Sukuk issues at AA- and assigned the new $1billion 3.473% due 2023 and $1billion 5.06% due 2043 international Sukuk issues a final rating of AA-.
“SEC’s affirmation at the AA- rating level with a stable outlook reflects Fitch’s consideration of SEC against the broader global electric utility peer group, where it is currently amongst the highest rated entities, the residual risks and opportunities inherent in the sector; and the scale of the current investment programme, including its expected weight upon SEC’s balance sheet over the next few years. The detachment from the Saudi sovereign rating (‘AA-‘/Positive), not continuing to align the ratings as the sovereign is upgraded, reflects the continuing expectation of direct and indirect support from the Saudi government and its institutions, as well as the low expectation of electricity market liberalisation within a meaningful time horizon.”
To clarify further, Fitch added, if the sovereign rating were to be upgraded to AA at some stage in the future, SEC’s rating would likely remain at ‘AA-‘, notched down from the sovereign rating.
The affirmation follows Fitch’s decision to affirm Saudi Arabia’s Long-Term foreign and local currency IDRs at ‘AA-‘ and revise the outlook to positive from stable.