Fitch Ratings has upgraded Saudi Electricity Company's (SEC) Long-Term Foreign- and Local-Currency Issuer Default Ratings to 'A+' from 'A', and removed the ratings from Under Criteria Observation (UCO). The National Long-Term Rating was also upgraded to 'AAA(sau)' from 'AA+(sau)'. The agency also said in its reports that all the outlooks are Stable.
The upgrade follows a reassessment of SEC's links with the Saudi Arabian government under Fitch's recently updated Government-Related Entities (GRE) Rating Criteria. SEC's ratings are now equalized with those of Saudi Arabia (KSA, A+/Stable), as the new support score assumes 'Virtually Certain' support from the state, based on GRE Criteria definitions. The international credit rating agency" Moody's" has affirmed Saudi Arabia's credit rating at “A1" with positive outlook.
In its latest report report, the agency said the rating affirmation is based on its assessment of the government's significant progress that achieved in implementing broad-based reform agenda since 2016 and the track record of macroeconomic and fiscal policy effectiveness that will support the sustainability of the economic diversification. The agency said it expects the continued implementation of large diversification projects in the Kingdom will support non-hydrocarbon real GDP growth as they are designed to be modular and commercialized in phases. It also also said the positive outlook is a reflection of the reforms and investments in various non-oil sector.