Moody's Investors Service ("Moody's") has today changed to positive from stable the outlook of State Oil Company of the Azerbaijan Republic (SOCAR). Concurrently, Moody's has affirmed SOCAR's Ba2 corporate family rating (CFR), Ba2-PD probability of default rating (PDR), b1 baseline credit assessment (BCA), and Ba2 rating of SOCAR's senior unsecured notes, APA-Economics reports citing Moody's.
Today's rating action follows a sovereign rating action on Azerbaijan which took place on 6 April 2021, during which Moody's changed the outlook on Azerbaijan's rating to positive from stable and affirmed the long-term issuer and senior unsecured debt ratings at Ba2.
According to the credit rating company, the positive outlook on Azerbaijan's rating reflects Moody's assessment that governance and in particular policy effectiveness is improving, albeit from a low base, which may raise the resilience of the government's credit profile. In particular, enhancements to the monetary and macro policy framework may promote stability in the external and banking sectors in the face of shocks, while continued effective use of sizeable fiscal buffers would allow counter cyclical spending and limits the deterioration in the government's fiscal and debt metrics.
As a result, Moody's expects that operating and macroeconomic environment for SOCAR will gradually improve, supporting its credit profile.
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