Moody's Upgrades Polish Gas Company
US ratings agency Moody’s has upgraded Polish state-run PGNiG's credit risk by one notch to Baa2, saying that the company enjoyed the support of the government, the integrated energy company said this week.
Moody’s said that PGNiG Group’s strong position on the domestic gas market, development of its hydrocarbon reserves portfolio, and efforts to diversify gas supplies all counted in its favour. It said that PGNiG had a strong financial position that could withstand falling wholesale gas prices while carrying out investments in upstream and modernise its gas distribution network, PGNiG said, summarising it.
“Developing gas production from own sources and ensuring security of gas deliveries through diversification of the supply directions and suppliers are the pillars of our strategy. The strategy is highly rated by independent financial institutions, as evidenced by the upgrade of our rating from Moody’s to Baa2,” said CEO Piotr Wozniak.
PGNiG may be under pressure from high costs of gas procurement under the Yamal contract with Russian gas monopoly Gazprom, accompanied by low market prices of gas, potentially weighing on revenues in the upstream and trade and storage. Nevertheless, Moody’s believes that PGNiG’s financial condition is sufficiently good to merit the upgrade from Baa3 to Baa2, said PGNiG.
PGNiG said the upgrade confirmed "that the levels of our credit rating and financial capacity are appropriate to allow us to put in place an ambitious investment programme while maintaining financial stability. After securing the zloty 10bn ($2.6bn) syndicated credit facility, it is another proof that our approach to PGNiG management is well perceived by the financial market."