BAKU, Feb 9 (Reuters) - Standard & Poor’s has revised down its outlook for Azeri state energy firm SOCAR to negative from stable, following a recent similar revision to the country’s sovereign credit outlook.
S&P affirmed its BB+ long-term corporate credit rating on SOCAR, which is 100 percent owned by the Azeri government.
“The negative outlook on SOCAR mirrors that on the sovereign and reflects our view of the company’s very strong link with the government and its critical role for the country,” S&P said.
“The rating on SOCAR reflects our view of the ‘extremely high’ likelihood that its owner, the government of Azerbaijan, would provide extraordinary support to the company.”
S&P revised down Azerbaijan’s sovereign credit outlook to negative on Jan. 30, saying the oil-rich country’s fiscal and external balances would be hurt by the substantial drop in oil prices.
Economic growth in Azerbaijan, a former Soviet republic, slowed to 3 percent in 2014, nearly half the level seen the previous year, due to the slump in oil prices.
The republic’s 4.4 percent growth target for this year is seen at risk because it envisages oil at $90 a barrel, almost double where it has been trading. (Reporting by Nailia Bagirova and Margarita Antidze; Writing by Margarita Antidze; Editing by David Holmes)