Fitch rates OGK-2 bonds BB

Fitch Ratings said it assigned a final local-currency senior unsecured rating of BB to PJSC The Second Generating Co. of Wholesale Power Market’s (OGK-2) RUB 10 billion 11˝% domestic bonds due in 2020.

The rating is in line with OGK-2’s long-term local-currency issuer default rating of BB with a stable outlook as the bonds represent direct and unsecured obligations of the company.

The proceeds will be used to fund the company’s investment program, along with refinancing and general corporate needs.

The BB rating considers a one-notch uplift to the company’s BB- standalone rating for parental support from the ultimate majority shareholder, PAO Gazprom, Fitch said.

The company’s standalone rating is underpinned by its position as one of the largest power generators in Russia and cash-flow generation from capacity sales under the Capacity Supply Agreements, the agency said.

The stable outlook reflects the company’s ability to commission its new units and transfer the 420 megawatts unit of Serovskaya GRES to PJSC Inter RAO, Fitch said.

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