S&P rates Reliance notes BBB+

Standard & Poor’s said it assigned a BBB+ long-term issue rating to the proposed dollar-denominated senior unsecured notes by Reliance Industries Ltd.

The notes will rank equally with all the company’s other present and future unsecured and unsubordinated obligations.

The proceeds will be used to fund the company’s ongoing capital expenditure mainly in the refining and petrochemical sector in India, S&P said.

Marginally weaker refining and petrochemical margins, along with a steep fall in crude oil prices, resulted in subdued profitability in the quarter ended Dec. 31, the agency said. A further decline in crude oil prices, combined with weaker shale gas prices, could influence Reliance’s profitability over the next six- to 12-months, S&P said.

But, the agency said it expects the company’s current investment in large refining and petrochemical sector projects will help it improve profitability beginning in fiscal 2017.

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