Fitch: Novatek notes BBB-

Fitch Ratings said it assigned a final senior unsecured rating of BBB- to Novatek Finance Ltd.'s $1 billion loan participation notes due 2022.

Novatek Finance is a special purpose financing vehicle purposed with funding the loan to OAO Novatek, which 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).

Novatek Finance Ltd. has a senior unsecured rating of BBB-.

The noteholders will rely solely on Novatek's credit and financial standing for the payment of obligations under the notes, Fitch said.

In November, the company announced that it would acquire a 49% stake in ZAO Nortgaz. Fitch said it views the acquisition as enhancing the company's domestic business profile. The transaction is likely, however, to see leverage metrics breach the parameters that the agency said it set out as likely to trigger a downgrade if sustained over 12 to 18 months.

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 added.

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