Fitch puts Naftogaz on Rating Watch Negative

Fitch Ratings announced yesterday that it placed the long-term local and foreign currency Issuer Default Rating of Naftogaz of Ukraine, currently at ‘B-‘, on Rating Watch Negative. Fitch said the move reflects near-term concerns regarding inadequate state subsidies for the company, rising payment arrears from municipal heating enterprises, a decline in its industrial supply segment, and the availability of US dollars to meet its obligations. Fitch noted that the RWN placement does not indicate concerns about Naftogaz’ ability to pay off Eurobond holders on March 3 and Gazprom on March 7.