Moody's assigns first-time A1 rating to Saudi Aramco with stable outlook

Moody's Investors Service on Monday assigned a first-time A1 long-term issuer rating to Saudi Arabian Oil Company (Saudi Aramco) and a provisional (P) A1 rating to Saudi Aramco's Global Medium Term Note (GMTN) program, a statement said, adding that the outlook is stable.

"Saudi Aramco has many characteristics of a Aaa-rated corporate, with minimal debt relative to cash flows, large scale of production, market leadership and access in Saudi Arabia to one of the world's largest hydrocarbon reserves. These features position it favourably against the strongest oil and gas companies that Moody's rates," said Rehan Akbar, a Vice President - Senior Credit Officer at Moody's.

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"The final rating is however constrained by the government of Saudi Arabia's A1 rating because of the close interlinkages between the sovereign and the company," it added.

Moody’s said Saudi Aramco benefits from a very large operational scale, significant downstream integration and strong financial flexibility given its low cost structure and robust balance sheet. This provides considerable credit resilience through oil price cycles.

“The company is the world's largest oil supplier and has exclusive access to nearly all of Saudi Arabia's vast hydrocarbon resources, which are one of the world's largest proven oil and gas reserves,” the rating agency said.

It however added that Saudi Aramco's rating is constrained by the rating of the government of Saudi Arabia given the broad credit linkages between the two.