S&P downgrades SOCAR’s rating
In addition, S & P removed the long-term corporate credit rating of SOCAR from the list of CreditWatch Negative.
The downgrade was caused by high capital expenditures, aggressive financial policies and the fact government support may not be sufficient to compensate for the risks associated with high and growing indebtedness of SOCAR, the report says.
At the same time, the agency believes that the state, if necessary, will provide proper support to SOCAR, since the company is a "key asset in the oil and gas sector" for the government.
S & P is considering increasing the share of SOCAR in the Azeri-Chirag-Gunashli project development project to 25% from 11.6% as "a clear sign of continued support to the company."
The agency stresses that SOCAR is subject to risks associated with the weak banking system of Azerbaijan. At the same time, the agency notes that the recent problems related to the restructuring of the external liabilities of the International Bank of Azerbaijan (IBA) have had a limited impact on SOCAR.
"We also believe that the company faces certain currency risks, since most of its debt and capex are denominated in US dollars," the press release said.
However, the agency stressed that the liquidity of SOCAR is still manageable.
S & P believes that the upgrade of SOCAR's ratings in the next two years remains under the question due to the company's significant debt.
Related news releases
- 16.07.2018Central Bank announces result of today’s auction
- 16.07.2018IBA strengthens its capital position
- 13.07.2018Central Bank of Azerbaijan to attract AZN 350M
- 13.07.2018Payments on insurance against industrial accidents amounts to AZN 1.8M
- 13.07.2018Premiums on real estate compulsory insurance increase
- 13.07.2018Azerbaijan sees rise in compulsory insurance of automobiles
- 13.07.2018Azer Turk Bank offers free salary cards to corporate clients
- 13.07.2018Azerbaijan-based insurers ranking for payment growth rate in H1
- 13.07.2018Investments in Azerbaijan’s fixed capital decline by 14%
- 13.07.2018Kapital Bank’s assets in Q2 make up AZN 3.5B
- 13.07.2018Azerbaijan-based insurers ranking for premiums growth rate in H1
- 13.07.2018Azerbaijan-based insurers ranking for ratio of payments to premiums in H1
- 13.07.2018Azerbaijan-based insurers ranking for market share of premiums in H1
- 13.07.2018Azerbaijan-based insurers ranking for payments in H1
- 13.07.2018Azerbaijan-based insurers ranking for premiums
- 13.07.2018Azerbaijan-based insurers’ premiums exceed AZN 396M
- 13.07.2018Official Exchange Rates
- 12.07.2018Georgia’s debt to Azerbaijan declines
- 12.07.2018EBRD increases its share in Unibank
- 12.07.2018Nakhchivanbank ends Q2 on profit
- 12.07.2018State Customs Committee increases budget transfers by 38%
- 12.07.2018Azerbaijan’s positive balance from foreign trade turnover doubles
- 12.07.2018Azerbaijan triples car import
- 12.07.2018London-Mumbai flight makes emergency landing in Baku
- 12.07.2018BSE turnover increases by 2.7-fold
- 12.07.2018Pasha Capital heads brokers ranking for June
- 11.07.2018Bank Melli Iran Baku sees decline in loan portfolio
- 11.07.2018Azerbaijan exports products to 95 countries in five months
- 11.07.2018Average monthly salary in Azerbaijan increases by 4%
- 11.07.2018British law firm shuts down its Azerbaijan-based office
- 11.07.2018British company opens office in Azerbaijan
- 11.07.2018One more NBCI declared bankrupt in Azerbaijan
- 10.07.2018NBC Bank gets 23% rise in liabilities
- 10.07.2018State budget executed with surplus of AZN 297M ion H1
- 09.07.2018Central Bank announces result of today’s auction
- 07.07.2018Deputy chairmen of State Customs Committee changed
- 06.07.2018Azerbaijani President approves amendments to 2018 state budget
- 06.07.2018USD rate for July 9 announced
- 06.07.2018Bakcell strongly objects to illegal activities in Nagorno-Karabakh
- 06.07.2018Moody's upgrades outlook on Xalq Bank
- 03.11.2017Kestutis Yankauskas: Azerbaijan can always rely on EU’s assistance for rural development
- 03.11.2017Kestutis Yankauskas: Azerbaijan to spend 40 percent of funds to be allocated by EU on rural development
- 03.11.2017Azerbaijan-based banks’ net worth exceeds AZN 3B
- 02.11.2017Central Bank of Azerbaijan to attract AZN 100M
- 02.11.2017AZAL repays AZN 210M loan to Central Bank
- 02.11.2017Tax overpayments to state budget totals $2.1B