Fitch rates Gaz Capital note BBB-

Fitch Ratings said it assigned an expected BBB- rating to Gaz Capital SA's issue of a fifth tranche under the existing $15 billion loan participation note program (rated BBB-), which relies on a senior unsecured liability of Russia-based OAO Gazprom for repayment.

In July, Fitch upgraded Gazprom's issuer default and senior unsecured ratings to BBB- from BB+. The upgrade was supported by Gazprom's 2005 financial results, Fitch said, which showed a continuing trend of increasing profitability through a reduction in operating costs as a percentage of revenues.

The agency said it will continue to monitor the company's operating performance, especially investments being made to address the declining production levels at the company's key mature fields. Another area of concern is the company's relatively high transport infrastructure construction costs.

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