Fitch: Novatek notes BBB-

Fitch Ratings said it assigned an expected senior unsecured rating of BBB- to Novatek Finance Ltd.'s dual-tranche multi-currency loan participation notes.

The notes will be issued on a limited recourse basis for the sole purpose of funding a loan to OAO Novatek.

OAO Novatek has a long-term foreign-currency issuer default rating of BBB-, senior unsecured rating of BBB-, long-term local-currency issuer default rating of BBB-, national long-term rating of AA+(rus) and national senior unsecured rating of AA+(rus).

The outlook is stable.

The noteholders will rely solely on Novatek's credit and financial standing for the payment of obligations under the notes, Fitch said. Novatek Finance is a special purpose financing vehicle of Novatek, but is not directly or indirectly a subsidiary, the agency said.

The ratings reflect little additional debt headroom with a forecast that its funds from operations adjusted gross leverage ratio will exceed the current negative rating guideline of 2x in 2012 due to a planned acquisition, Fitch said.

Novatek occupies a strategic position in the gas-rich Yamal region, where it has plans to develop liquefied natural gas production in the medium term, the agency said. The company's scale relative to peers is currently a limiting factor for the rating. This may change once Yamal production comes on line, Fitch said.

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