Fitch affirms Gazprom

Fitch Ratings said it affirmed OAO Gazprom's long-term foreign- and local-currency issuer default ratings at BBB, foreign-currency senior unsecured rating at BBB, short-term foreign-currency issuer default rating at F3 and national long-term rating at AAA(rus).

The agency also affirmed the foreign-currency senior unsecured rating on Gaz Capital SA's debt issuance program and the notes issued under it at BBB.

The local-currency senior unsecured rating also was affirmed at BBB on OOO Gazprom Capital's debt issuance program and issues, along with its national senior unsecured rating of AAA(rus).

Gazprom ECP SA's commercial paper program also was affirmed at F3.

The outlook is stable.

Fitch also said it assigned a final senior unsecured rating of BBB to Gaz Capital's $1 billion 4.95% and €750 million 3.755% loan participation notes due July 2022 and March 2017, respectively, as well as an additional issue of €650 million 3.755% loan participation notes at 101.083% of principal due March 2017.

The notes will be the 26th and 27th series issued under Gaz Capital's $30 billion debt issuance program.

The ratings reflect expectations that Gazprom will continue to benefit from European gas export sales under long-term contracts with prices largely linked to oil products prices, Fitch said, at least in the medium term.

While the agency said it expects the pressure on pricing terms under Gazprom's long-term European contracts to continue in the short- to medium-term, due to the challenging economic environment, the agency believes that Gazprom's financial policy and production profile have sufficient flexibility to accommodate some potential concessions without jeopardizing the company's credit metrics.

These contracts provide the necessary balance between the large capital requirements of the gas projects and customers' need for stable and secure gas supplies, the agency said.

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