Fitch puts PKN Orlen on watch

Fitch Ratings said it placed Polski Koncern Naftowy Orlen SA's ratings on Rating Watch negative, including its BBB- long-term and F2 short-term foreign- and local-currency issuer default ratings and the expected BBB- rating assigned to a planned senior unsecured bond issue.

The agency said the rating action reflects the uncertainty as to the potential impact of two large one-off events in the fourth quarter on the company's accounting figures for that period. These include a large non-cash inventory holding loss expected in the fourth quarter on the back of a slide in crude oil prices and an increase in the Polish zloty-equivalent value of PKN's euro- and dollar-denominated loans due to a marked depreciation of the zloty.

The combination of these accounting impacts could adversely affect covenant provisions in some of the company's bank loans and require the company to seek a waiver or a covenant amendment from its lending banks, Fitch said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.