Finance

Finance

Moodyâ€™s gives rating to SOCAR Eurobond purchase

21 January 2016 08:06 (UTC +04:00)

On 18 January, SOCAR launched an invitation to holders of its outstanding Notes to tender them for purchase by the company at 102% of par value.

This view also takes into account that these Notes represent a fairly small share of the company's total debt, at approximately 6% as of 30 June 2015. However, Moody's positively notes that this transaction will allow SOCAR to reduce its scheduled debt repayments in 2017, which currently total $946 million, thereby improving its liquidity profile: “We note that the company recorded a $0.9 billion foreign-exchange loss in H1 2015 primarily as a result of the revaluation of its foreign-currency debt following the devaluation of the manat to 1.05 USD/AZN in February 2015, from 0.78 USD/AZN earlier. Although the company expects to be in compliance with its financial covenant as of year-end 2015, we note that low oil prices, if sustained, can put further pressure on Azerbaijan manat in 2016. This would negatively affect the company's tangible net worth, creating the potential risk of the company's tangible net worth falling below the $4 billion threshold during 2016”.