Fitch rates Naftogaz bond B+

Fitch Ratings said it assigned Ukraine-based and state-owned NJSC Naftogaz's senior unsecured local currency and foreign currency B+ ratings. Fitch rates Naftogaz in line with Ukraine's sovereign rating due to the strategic importance of the company to the state.

At the same time, Fitch said it assigned a B+ rating to Naftogaz's upcoming eurobond issue. The outlook is stable.

Standard Bank London Holding plc will issue limited recourse loan participation notes for the sole purpose of financing a loan to Standard Bank London Ltd. Standard Bank London will use the proceeds of the loan for the sole purpose of financing an on-loan between Standard Bank London and Naftogaz.

Fitch said key factors supporting the ratings include the company's close link to the state, as it generates about 10% of GDP, and its monopoly position in supplying natural gas and crude oil to the country's consumers, as well as the strategic role enjoyed in the transportation of oil and gas to western markets. The ratings also take into account that an economic downturn may once again hinder the gas consumers' ability to pay for gas in a timely manner.

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