Fitch downgrades eustream

Fitch Ratings said it downgraded eustream, as long-term issuer default rating and senior unsecured rating to BBB+ from A- and placed them on rating watch negative.

“The rating actions reflect the increased risks to Gazprom's (B/RWN) willingness and ability to honor its obligations under its ‘ship-or-pay’ gas transit contracts with eustream, which make up the majority of eustream's operating cashflows. This follows tightening sanctions on Russia and its corporates and Russia's own restrictions since its military invasion of Ukraine last week, as well as Europe's growing desire to reduce its energy imports from Russia,” Fitch said in a press release.

Fitch said it plans to resolve the RWN once it has better long-term visibility of the transit business and eustream's target financial profile, assuming significant changes in the European gas market. The resolution could take longer than six months.

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