BUCHAREST - Fitch Ratings has revised the outlook on the long-term issuer default rating (IDR) for Romania's state-owned natural gas company, Societatea Nationala de Gaze Naturale Romgaz S.A. (ROMGAZ), from 'Stable' to 'Negative'. The credit rating agency also affirmed the company's 'BBB-' IDR.
The revision, announced on Monday, aligns with a recent adjustment of Romania's sovereign rating outlook, which was changed from 'Stable' to 'Negative' on December 17, 2024. Consequently, the alteration in the country's rating directly influenced the modification of ROMGAZ's outlook, based on the interconnected financial environments.
Fitch's commentary on the rating action highlighted ROMGAZ's leading position in Romania's natural gas sector and the potential for production growth, particularly from strategic projects like the Neptun Deep and Caragele reservoir developments. The agency also noted ROMGAZ's conservative financial policy as a factor in the rating affirmation.
ROMGAZ was first assigned a credit rating by Fitch on May 21, 2024, with details released to the capital markets the following day. The company's securities are traded on both the Bucharest Stock Exchange (BVB) and the London Stock Exchange (LON:LSEG) (LSE).
The credit rating is an assessment of ROMGAZ's ability to meet its financial commitments. A 'BBB-' rating indicates that expectations of default risk are currently low. However, the change to a 'Negative' outlook suggests that potential risks are increasing, which could affect the company's rating in the future.
This rating action serves as a critical update for shareholders and investors, reflecting the creditworthiness of ROMGAZ in the context of the broader economic conditions in Romania. The information is based on a press release statement from ROMGAZ.
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