BAKU, Azerbaijan, July 9. Moody’s Ratings
(Moody’s) has today changed to positive from stable the outlook of
State Oil Company of the Azerbaijan Republic (SOCAR), Trend reports citing the
rating agency.
“Today’s rating action is in line with the sovereign rating
action and reflects SOCAR’s strong credit linkages with the state
as well as its significant exposure to Azerbaijan’s operating and
macroeconomic environment. The rating action also reflects the
company’s sound financial performance and credit metrics amid
resilient oil and gas market environment; strategic importance for
the government of Azerbaijan; and a track record of more discipline
in strategic and shareholder decisions, investment spending and
shareholder distributions which translate into positive cash
generation and solid liquidity,” said the agency.
Moody’s notes that the positive outlook on the sovereign rating
reflects improved economic prospects that have led to a
strengthening in credit metrics.
“Rising prominence of the Middle Corridor further bolsters
Azerbaijan’s ambition to be a Eurasian transport hub. Greater EU
demand for Azeri gas as well as a widening pipeline of renewable
projects accelerates diversification from depleting oil resources.
At the same time, a lengthening track record of maintaining
macroeconomic stability and fiscal discipline confers greater
credibility to institutional effectiveness, as proven from
resilience in the credit through recent shocks.
“As a result, operating and macroeconomic environment for SOCAR
has improved and the government’s financial capacity to support the
company, if needed, has strengthened, which is credit positive for
the company,” notes the rating agency.
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