Fitch Ratings has affirmed State Oil Company of the Azerbaijan Republic's (SOCAR) Long-Term Issuer Default Rating (IDR) at 'BB+', Short-Term IDR at 'B' and senior unsecured rating at 'BB+', the agency reported.
All ratings have been removed from Rating Watch Negative (RWN). The Outlook is Stable. SOCAR's rating is aligned with the rating of Azerbaijan (BB+/Stable).
‘SOCAR was among the companies Fitch placed on Rating Watch in November 2017 when the exposure draft of its new Government-Related Entities (GRE) Rating Criteria was published. At the time, Azerbaijan's 'BB+' rating was on Negative Outlook and we were reassessing the standalone credit profile (SCP) of SOCAR. We had previously aligned SOCAR's rating with Azerbaijan's but under the proposed methodology, SOCAR's rating could have been assigned using a top-down approach if its SCP was more than three notches below the sovereign rating and the credit standing of Azerbaijan deteriorated further.
In line with the final GRE rating criteria we have decided to continue to align SOCAR's rating with that of Azerbaijan (now on Stable Outlook) based on SOCAR's SCP being commensurate with a 'B+' rating and the strength of the support from the state mapping to scores between 35 and 42.5’,the agency said.