Fitch upgrades SmVak

Fitch Ratings said it upgraded Severomoravske vodovody a kanalizace Ostrava as’ (SmVaK) long-term issuer default rating to BBB- from BB+, following the early redemption of its CZK 5.4 billion bond due in July 2022 with funds provided by the parent company Aqualia Czech SL, which in turn is 99.99% owned by FCC Aqualia SA.

“The bond early redemption with intercompany financing strengthens the linkage between SmVak and Aqualia, in our view, mostly due to the removal of legal ringfencing at Smvak level. The reassessment of the parent subsidiary linkage (PSL) results in an equalization of the ratings, which places SmVak's IDR at BBB-,” Fitch said in a press release.

The outlook is stable.

Fitch said it withdrew its ratings for SmVaK for commercial reasons.

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