Moody's affirms ratings of Aramco, SABIC, STC, SEC; cuts outlook to negative

Moody's Investors Service affirmed the ratings of the Saudi Arabian Oil Company (Saudi Aramco), Saudi Basic Industries Corporation (SABIC), Saudi Telecom Company (STC) and Saudi Electricity Company (SEC), but downgraded their outlook to negative from stable.

"The rating actions are a direct consequence of the sovereign rating action and reflect the credit linkages between the Government of Saudi Arabia and each of the four government-related issuers (GRIs). While these corporates benefit to varying degrees from international assets and cash flows, they all have significant credit linkages to the Saudi Arabia sovereign and are exposed to the domestic environment including political, economic, regulatory and social factors", according to Moody's.

Saudi Aramco, the world's largest oil supplier, has exclusive access to nearly all of Saudi Arabia's vast hydrocarbon resources. It is benefiting from its large operational scale, low cost structure and strong financial flexibility.

SABIC is one of the world's largest petrochemical producers and benefits from a competitive cost position and significant economies of scale.

STC enjoys solid financial profile, leading position in the domestic market, where it holds a solid market share, along with a strong EBITDA margin and liquidity.

SEC's  baseline credit assessment (BCA) remains supported by the company's low business risk profile and a dominant domestic market position.