S&P Global upgrades SOCAR’s long-term issuer credit rating to 'BB'
Baku, November 15, AZERTAC
S&P Global Ratings has raised the long-term issuer credit rating and issue rating of the State Oil Company of Azerbaijan (SOCAR) and its senior unsecured debt to 'BB' from 'BB-'.
“We have seen material improvement in the State Oil Company of Azerbaijan Republic's (SOCAR's) financial policy transparency and disclosure levels in communications with us, which improves our visibility of the company’s performance.
We reflect those changes in an uplift of our assessment of SOCAR’s stand-alone credit profile (SACP) to ‘bb-’ from ‘b’.
We therefore raised the long-term issuer credit rating and issue rating of SOCAR and its senior unsecured debt to 'BB' from 'BB-',” S&P Global Ratings said.
Noting that a clearer financial policy and improved transparency adds visibility to SOCAR’s credit profile, S&P Global Ratings stated: “We revised our assessment of the company's governance and financial policy, which affected our view of its SACP, to ‘bb-’ from ‘b’. Although SOCAR is still lagging, we have seen meaningful progress in this regard recently. This improvement includes timeliness and scope of disclosure, with better granularity on the company’s business segments, corporate structure, and strategy. We now understand SOCAR will focus more on domestic upstream projects, which have been core to its cash flow and have less uncertainty on investments than previous years. Still, we will be closely monitoring developments given the company’s track record of opportunistic investments and complex corporate structure.”
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