Baku. 6 March. REPORT.AZ/ Fitch Ratings-London-06 March 2015: Fitch Ratings has assigned State Oil Company of the Azerbaijan Republic's (SOCAR; BBB-/Stable) proposed notes an expected foreign currency senior unsecured rating of 'BBB-(EXP)', in line with SOCAR's Long-term Issuer Default Rating.
Report informs, The proceeds from the notes issuance are expected to be partially used to fund the company's capex and other general corporate purposes.
SOCAR's ratings are aligned with Azerbaijan's (BBB-/Stable), as it represents the state's interests in the strategically important oil and gas industry. SOCAR maintains close ties with the government and the State Oil Fund of the Republic of Azerbaijan (SOFAZ) to make financial and investment decisions.
SOCAR had USD1.5bn of cash at 30 June 2014, which was insufficient to cover its short-term debt of USD2.2bn on that date. Of the total cash and restricted cash at mid-2014, about 50% was held at the state-owned International Bank of Azerbaijan (BB/Stable), a related party. SOCAR's short-term debt at mid-2014 accounted for 32% of its gross debt, up from 30% at end-2013.
According to Fitch agency SOCAR-Azerbaijan's sovereign rating has not changed and will remain at this level for the duration of the government support to the company.