Fitch: Gaz Capital notes BBB-

Fitch Ratings said it assigned an expected senior unsecured rating of BBB- to Gaz Capital SA’s loan participation notes.

The planned notes are the 38th series to be issued under Gaz Capital’s $40 billion debt issuance program, which is rated BBB-.

The notes will be issued on a limited recourse basis for the sole purpose of funding a loan to PJSC Gazprom, Fitch said.

The proceeds are expected to be used by Gazprom for general corporate purposes, the agency said, and the noteholders will rely solely on Gazprom’s credit and financial standing for the payment of obligations under the notes.

The ratings reflect an expectation that the company will remain a vital gas supplier to Europe in the medium term despite competitive and political pressures, Fitch said.

Gazprom’s access to international banks and debt capital markets improved in 2015 despite geopolitical tensions over Ukraine, the agency said, and its liquidity is currently strong.

Fitch also said it believes the latest U.S. sanctions against the Yuzhno-Kirinskoye oil and gas field should not materially affect Gazprom’s operations.

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