Global Arab Network | UAE: Moody's Assigns Aa3 to International Petroleum Investment Company GMTN Programme

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UAE: Moody's Assigns Aa3 to International Petroleum Investment Company GMTN Programme

Global Arab Network - - Rabih Serrai

Tuesday, 08 March 2011 21:57

UAE_International_Petroleum_Investment_Company_IPIC_Abu_Dhabi

UAE (Dubai) - Moody's Investors Services has today assigned provisional (P)Aa3 ratings to both the GMTN programme of International Petroleum Investment Company GMTN Limited ("IGL") as the issuer of the notes and the proposed notes to be issued under the programme, Global Arab Network reports according to a press statement.

The programme was established in November 2010 and Moody's has reviewed the base prospectus (dated November 1, 2010) and the supplement number 1 (dated March 4, 2011).

The notes under the programme are issued by IGL, a Cayman Islands-based finance vehicle wholly-owned by International Petroleum Investment Company P.J.S.C. ("IPIC"). The programme and the notes' ratings are in line with IPIC's Aa3 issuer ratings as IPIC is unconditionally and irrevocably guaranteeing the notes and the notes will rank pari passu with all other unsecured and unsubordinated debt of IPIC.

IPIC's ratings are derived off Abu Dhabi's Aa2 sovereign ratings and currently factor very high support from the government of Abu Dhabi, given the company's central policy role in developing the Emirate's wider hydrocarbon sector as evidenced by 26 years of regular government equity injections in support of IPIC's investments. It remains heavily funded directly by the government in addition to its own capital market and bank borrowing activities. Furthermore, the government has formally assured Moody's that it fully and unconditionally stands behind IPIC for any debt - both principal repayments and debt servicing - on a timely basis in the event that the company were unable to provide for itself, a policy that is also expected to remain in place for the foreseeable future.

Whilst this commitment is substantial and will continue to result in Moody's considering it appropriate to reflect this support in meaningful uplift to the ratings of IPIC, the one notch distinction between IPIC's rating and that of the sovereign reflects the absence of an explicit government guarantee.

The last rating action was on November 11, 2010 when Moody's assigned Aa3 ratings to IPIC's proposed issues of USD1,000 million of senior notes due 2015 and USD1,500 million due 2020.

The principal methodology used in this rating was Government-Related Issuers: Methodology Update published in July 2010.

International Petroleum Investment Company ranks amongst Abu Dhabi's sovereign-owned investment vehicles, also often referred to as sovereign wealth funds. It was created by Emiri Decree in 1984, initially as a 50:50 joint venture between the Abu Dhabi Investment Authority and the Abu Dhabi National Oil Company and later brought under direct government ownership. IPIC plays an integral role in the Abu Dhabi government's policy of safeguarding transportation and export of its crude oil by identifying long-term international investments in hydrocarbon markets with a focus on downstream operations.

Global Arab Network

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