The international rating agency Fitch has affirmed the credit rating of the National Joint Stock Company Naftogaz of Ukraine at ‘CC’. This rating is higher than Ukraine's sovereign rating (RD), the company said.
According to the agency, Naftogaz has moderate ties to the state, which allows the company to be assessed on a standalone basis.
Fitch also affirmed the rating of Naftogaz's Eurobonds issued by Kondor Finance plc at ‘C’. The Recovery Rating has been kept at ‘RR6’ as the company continues to make timely and full payments on its 2023 restructured Eurobonds.
One of the key factors that influenced the company's position, Fitch calls the preservation of infrastructure and stable production growth, as well as the improvement of the company's financial performance, in particular cash flow from operations.
The agency also points out that the rating is significantly impacted by high operational risks amid the war with Russia, the suspension of gas transit, non-payments for gas sold and limited access to external financing.
In addition, Fitch noted the absence of any compensation from the state for Naftogaz's performance of its Public Service Obligations (PSO) since the beginning of the war. Work with the state to obtain compensation for PSO and the difference in tariffs in 2024 is ongoing.