Fitch Ratings affirms TGC-1 at 'BB+', Outlook Stable

06.10.2016

October 05, 2016 - Fitch Ratings has assignedlong-term Issuer Default Rating (IDR) of TGC-1 in foreign and local currency at 'ВВ+', Outlook Stable, and short-term IDR in foreign and local currency at 'В'.

TGC-1 'BB+' rating is due to the solid credit status of the company. Fitch Ratings experts believe that TGC-1 shall demonstrate sound financial performance in 2016-2019.

The rating also takes into account sound business profile of the company with favourable geography of operations, strong market position in electricity and heat sales in St. Petersburg and the border regions, as well as supportive regulation of activities under CDA, still mentioning growing regulativity as a deterrent.

New power units commissioned under CDA provided about 41% of TGC-1 EBITDA in 2015. The agency forecasts the Company's EBITDA to reach about 45% by 2017 upon commissioning of the rest power units under CDA at Centralnaya CHPP.

One of the key rating factors listed in the Fitch message is the company's profitability growth due to hydroelectricity output and advantages of TGC-1 business profile due to diversification: separation of electricity output by HPPs and CHPPs.