The assessment indicates that the credit quality of the firm’s debt has deteriorated.

The change follows lower than expected pre-tax operating profit reported for the third quarter of $115m, which was $156m below the same period in 2006.

The adjustment was also made due to weaker prospects for the polycarbonate markets and rising material costs that had not be incorporated into the company’s pricing, S&P said in a statement.

S&P expects Sabic Innovative Plastics’ parent company Saudi Basic Industries Corporation (Sabic) will have to offer it financial support in 2008.