Fitch rates Gaz Capital notes BB

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

The final rating for this tranche will be assigned once the tenor, amount and currency of the issue are decided.

In November 2004, Fitch said it changed the Rating Watch on Gazprom's senior unsecured foreign currency and local currency ratings to positive from evolving following the agency's sovereign upgrade. The positive watch reflects the increased likelihood of an upgrade for Gazprom due to its strategic linkage to the state and synergies to be gained from an increase of state ownership following its possible merger with Rosneft, which is still pending but now looks increasing unlikely.

Fitch said it still expects the state to increase its ownership interest in Gazprom, although perhaps not through a merger with Rosneft.

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