Fitch has also affirmed the rating of Naftogaz's Eurobonds, issued through Kondor Finance plc, at 'C', with the Recovery Rating maintained at 'RR6'. This reflects the company’s full and timely payments on the Eurobonds restructured in 2023.
One of the key factors influencing the company's position, according to Fitch, is the preservation of infrastructure, stable production growth, and improvements in the company's financial performance, particularly in cash flow from operations.
The agency also notes that the rating is significantly affected by high operational risks amid the war with Russia, the termination of gas transit, non-payment for gas sales, and restricted access to external financing.
Additionally, Fitch highlights the absence of any compensation from the state since the beginning of the war for Naftogaz's fulfillment of its Public Special Obligations (PSO). Management continues to work with the state to obtain compensation for the PSO and tariff differences in 2024.
