Fitch affirms Naftogaz's rating at CC

The international rating agency Fitch Ratings has affirmed the credit rating of the Naftogaz of Ukraine national joint-stock company at CC.

This is announced in a statement by Naftogaz, Ukrainian News Agency reports.

It is noted that such a rating is higher than Ukraine's sovereign rating (RD).

According to the agency, Naftogaz has moderate ties to the state, which allows it to assess the company on an autonomous basis.

The statement says that Fitch also affirmed the rating of Naftogaz's Eurobonds issued by Kondor Finance plc at C.

The Recovery Rating was left at RR6, as the company continues to make timely and full payments on Eurobonds restructured in 2023.

"One of the key factors that influenced the company's position, Fitch calls the preservation of infrastructure and the stability of production growth, as well as the improvement of the company's financial indicators, in particular cash flow from operating activities," the report says.

The agency also noted that the rating is significantly affected by high operational risks against the backdrop of the war with russia, the cessation of gas transit, non-payments for sold gas and limited access to external financing.

In addition, Fitch noted the absence of any compensation from the state for the performance of special obligations (PSO) assigned to Naftogaz since the beginning of the war. Management continues to work with the state to obtain compensation for PSO and the difference in tariffs in 2024.

The Naftogaz of Ukraine national joint-stock company is a leading enterprise of the country's fuel and energy complex, which is engaged in the exploration and development of deposits, drilling, storage of oil and gas, transportation of oil, as well as the supply of gas to consumers.

As Ukrainian News Agency earlier reported, in early December, Fitch Ratings confirmed Ukraine's long-term foreign currency rating at RD (limited default).