Fitch upgrades SOCAR to 'BBB-'

Fitch Ratings has upgraded State Oil Company of the Azerbaijan Republic's (SOCAR) Long-Term Issuer Default Rating (IDR) and senior unsecured rating to 'BBB-' from 'BB+', Report informs, citing the agency.

According to the agency, the outlook on the long-term IDR is stable.

The upgrade follows that of the sovereign rating of Azerbaijan ("Fitch Upgrades Azerbaijan to 'BBB-'; Outlook Stable" dated 26 July 2024). SOCAR is fully owned by the state and its rating is equalized with that of Azerbaijan (BBB-/Stable) under Fitch's Government-Related Entities (GRE) Rating Criteria.

This is underpinned by state support provided to the company in the form of financial guarantees, cash contributions, and equity injections, as well as SOCAR's social functions and its importance as a state vehicle for the development of oil and gas projects.

“We assess SOCAR's Standalone Credit Profile (SCP) at 'bb-', which reflects its mid-size oil and gas production, strong financial profile and corporate governance constraints,” the agency stated.