Fitch Ratings, an international credit rating agency, has revised the Outlook on the Naftogaz of Ukraine national joint stock company 's long-term foreign-currency Issuer Default Rating (IDR) to Positive from Stable and affirmed the IDR at “B.”
The rating agency announced this in a statement, the Ukrainian News Agency reports.
“The Outlook revision follows the revision of the Outlook on Ukraine's sovereign rating (B/Positive) and the application of Fitch's Government-Related Entities (GRE) Rating Criteria. Fitch equalizes Naftogaz's ratings with those of sovereign, reflecting the company's strong links with the sovereign and our assessment of the company's Standalone Credit Profile (SCP) at 'b-',” the rating agency said in the statement.
According to the statement, the “b-” SCP reflects volatility in operations after the unbundling, uncertainty about domestic price regulation and collectability of receivables with a weaker domestic economy and FX exposure.
“We expect liquidity to be under pressure due to high anticipated CAPEX as Naftogaz invests in its resource base to arrest a decline in natural gas production. We expect leverage to remain high compared with peers but stable as incurrence-based covenants limit indebtedness,” that statement said.
As Ukrainian News Agency earlier reported, Fitch Ratings revised the Outlook on Ukraine's long-term foreign-currency Issuer Default Rating (IDR) from Stable to Positive and affirmed the IDR at “B” in early August.
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