Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of State Oil Company of the Azerbaijan Republic and other ratings that are associated with the same analytical unit, APA-Economics reports.
SOCAR's baseline credit assessment (BCA), which measures the company's standalone credit strength, excluding any extraordinary government support, within the framework of Moody's Government-Related Issuers rating methodology, is b1.
A two-notch uplift of the rating from the BCA reflects Moody's assumption of a high probability of the government providing support to the company in the event of financial distress.
SOCAR's BCA factors in the company's key role in the oil and gas sector of Azerbaijan, close links with Azerbaijan's government and healthy liquidity. The BCA also takes into account the company's exposure to the volatile oil prices and local currency exchange rate, potential challenges in maintaining stable production over the longer term, and sizeable trading operations.
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