International rating agency “Moody’s Ratings” has affirmed the long-term issuer credit ratings of “Southern Gas Corridor” CJSC (SGC), a state-owned company engaged in the production of natural gas and gas condensate in Azerbaijan, as well as their sale and transportation to regional and European markets, at “Baa3” in both local and foreign currency, and the baseline credit assessment (BCA) at “baa3”.
According to information provided by “Elchi” citing “Moody’s”, the outlook for the ratings is “positive”.
“SGC’s “Baa3” ratings and positive outlook are in line with Azerbaijan’s sovereign rating and reflect the company’s strategic importance through its role in representing state interests in flagship gas projects, as well as its direct and indirect state ownership and history of proven support, including guarantees.
Currently, the state directly owns 49% of SGC shares, while the remaining 51% is owned by the State Oil Company of the Azerbaijan Republic (SOCAR, “Baa3” stable), a fully state-owned integrated national oil and gas company. Despite the state’s plan to sell a minority stake in SGC to XRG, the international investment arm of the Abu Dhabi National Oil Company, by the end of 2026, we expect the state to maintain control and influence over SGC’s strategy and policies. Therefore, in accordance with our rating methodology for government-related issuers, we consider SGC as a government-related issuer.
According to this methodology, the company’s rating includes a BCA of “baa3” reflecting its standalone creditworthiness, Azerbaijan’s “Baa3″ foreign currency rating, a very high correlation of default between the company and the state, and a high probability of extraordinary government support in case of financial distress,” the report stated.