MOSCOW (MRC) -- Fitch Ratings has raised PKN Orlen's credit rating to BBB-, with a 'stable' outlook, which means that after four years the company has won back its investment-grade standing, according to the company's press release.
This long-awaited change is a result of a consistent deleveraging effort and a policy aimed to maintain all financial ratios at safe levels, which has significantly improved the company's credit standing, despite the persistently challenging climate for the industry across Europe.
Fitch Ratings has also upgraded the company's national rating to A- (pol), with a 'stable' outlook.
As grounds for its decision, the agency pointed to the measures taken by PKN Orlen to maintain a stable financial standing, such as reduction and maintenance of leverage at a safe level, a reasonable capex policy taking account of macroeconomic conditions, as well as the successful sale of its interest in Polkomtel S.A. According to the agency, these measures support the Company's creditworthiness, especially given the challenging climate for the company's two core business segments - refining and petrochemicals.
According to the agency, the key factor underpinning the company's creditworthiness is its strategy update adopted in November last year, which reflects the focus on maintaining financial ratios at moderate levels. The agency analysts have also acknowledged the financial flexibility underlying the company's strategy. Emphasis has been placed on PKN ORLEN's sustainable investment policy, in particular the standby capex, which may be utilised depending on the implementation of key investment plans and the prevailing macroeconomic conditions, particularly in power generation and upstream.
"For the past four years, we have worked hard to regain our investment-grade rating – despite the challenging and highly volatile macroeconomic environment, we have reduced the Company's debt burden by more than PLN 7bn, reduced and have kept the financial leverage ratio at a comfortable level below 30%, and diversified our financing sources. We are a credible partner, also in the eyes of retail investors, as best evidenced by the huge success of the PKN ORLEN retail bonds issued in June, which were assigned a high "BBB+(pol)" rating by Fitch," said Slawomir Jedrzejczyk, CFO and Vice-President of the PKN ORLEN Management Board.
As MRC wrote previously, in June 2013, PKN Orlen, one of the largest oil and gas companies in Europe, offered for sale a second PLN 200m tranche of its bonds and expects the proceeds from the entire bond issue programme to reach approximately PLN 1bn. This move was done in response to the enormous interest in PKN Orlen bonds on the part of investors, who subscribed to the entire PLN 200m of the first series of bonds in just two days.
Polski Koncern Naftowy ORLEN S.A. (PKN Orlen) is a Polish oil and gas company. It has a lot of petrol stations in Poland, Germany, Czech Republic, Lithuania and Slovakia. It is the biggest company in Poland and one of the biggest oil and gas companies in Europe. Polish group PKN Orlen PKNA is a majority owner - 63% of czech polyolefins manufacturer Unipetrol.
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