Fitch upgrades Gazprom

Fitch Ratings said it upgraded OAO Gazprom's senior unsecured foreign currency and local currency ratings to BB+ from BB and removed them from Rating Watch positive.

The outlook is stable.

At the same time, Fitch also upgraded Gazprom's $5 billion program for the issuance of loan participation notes of Gaz Capital SA, as well as the $646.5 million loan participation note issued by Gazstream SA, to BB+ from BB. Both the program and the $646.5 million Gazstream note rely on a senior unsecured liability of Gazprom for repayment.

Fitch said that while it a degree of state support into the rating, other factors such as the company's stand-alone credit profile had more influence in the rating decision. This has subsequently led to a widening of the historical rating differential between the Russian Federation (BBB/stable/F3) and Gazprom from one notch to two notches, although the company's credit profile continues to be stable.

Other factors affecting Gazprom's ratings include additional expected strong earnings growth balanced against growing capital expenditures.

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