Fitch affirms IPIC of Abu Dhabi’s rating

Fitch Ratings has affirmed Abu Dhabi-based International Petroleum Investment Company PJSC’s (IPIC) long-term local and foreign currency Issuer Default Ratings (IDR) at AA and short-term foreign currency IDR at F1+.

The ratings are aligned with those of Abu Dhabi, IPIC’s parent. Fitch Ratings says this reflects its view that sovereign-owned IPIC is of strategic importance to the government in its role as an investment vehicle for the state, primarily in the domestic and foreign hydrocarbon and petrochemical sectors.

IPIC’s board of directors is appointed by the government. The company owns and manages infrastructure projects and investments central to Abu Dhabi’s strategy in the energy sector. These include the 1.5m b/d Abu Dhabi Crude Oil Pipeline (ADCOP) commissioned in 2012 and sold to the Abu Dhabi National Oil Company (ADNOC). IPIC represents the government’s interests through investments in oil and gas companies in Europe and the US. Its debts do not benefit from state guarantees or cross-default clauses, but tangible support has been offered in the past in the form of equity injections.

The group fully owns CEPSA and Nova Chemicals, and holds stakes in Borealis, OMV, Cosmo Oil and EDP Portugal.

In 2015 IPIC provided $ 1 billion funding to 1Malaysia Development Berhad (1MDB), a state-owned fund of Malaysia (A-/Stable), and agreed to cover coupon payments on $3.5bn debt issued by 1MDB’s subsidiary. Fitch Ratings said that it do not rule out a scenario where IPIC would be asked to provide further support to the fund.