BAKU, Azerbaijan, March 13
By Leman Zeynalova - Trend:
Fitch Ratings has affirmed Southern Gas Corridor CJSC's (SGC) senior unsecured Eurobonds' long-term foreign-currency rating at 'BB+', Trend reports.
The affirmation reflects Fitch's unchanged view on SGC's USD2 billion Eurobonds maturing in 2026 fully guaranteed by the Republic of Azerbaijan (BB+/Stable).
The rating reflects the unconditional, unsubordinated and irrevocable guarantee of full and timely repayment provided to SGC's noteholders by the state. As a result, Fitch views the notes' rating as equalised with Azerbaijan's Foreign-Currency IDR.
As most of the projects are already commissioned, SGC's total needs for cash in 2020 (comprising debt service costs of USD225.7 million and the reminder of the project costs of USD176.5 million) will be fully covered by expected proceeds from the operations of Shah Deniz, South Caucasus Pipeline and TANAP projects, along with accumulated cash, according to management's forecast.
SGC's funding stems from a combination of USD6.5 billion debt and USD2.4 billion equity injections from the state. SGC did not borrow any new debt in 2019, while 38.5% of its debt stock as of end-2019 comprised bonds issued in favour of the State Oil Fund of the Republic of Azerbaijan (SOFAZ), followed by IFI/IFI-backed loans (30.9%) and Eurobonds (30.6%).
SGC was founded on 31 March 2014 by the state (the Ministry of Economy of Azerbaijan Republic) (51 percent) and SOCAR (49 percent).
It was established with the purpose of consolidating, managing and financing the state’s interests in the Shah Deniz gas-condensate field (SD2), South Caucasus Pipeline Expansion (SCPX), implementation of Trans-Anatolian Pipeline (TANAP) and Trans Adriatic Pipeline (TAP) projects.
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