June 2, 2017 / 10:36 AM / 6 months ago

Fitch Affirms APETRA at 'AA-'; Outlook Stable

(The following statement was released by the rating agency) PARIS, June 02 (Fitch) Fitch Ratings has affirmed APETRA's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'AA-' with Stable Outlook and Short-Term Foreign Currency IDR at 'F1+'. Its senior unsecured notes have also been affirmed at 'AA-'. Fitch classifies APETRA as a credit-linked entity under its public-sector entity rating criteria, due to the consolidation of its debt into general government accounts, strong oversight by the government and its strategic role in government policy through ensuring the security of oil supplies for Belgium. As a result, APETRA's ratings are equalised with those of, and credit-linked to, Belgium (AA-/Stable/F1+). KEY RATING DRIVERS Legal Status (Stronger) APETRA is a limited liability company governed by public law and, as such, is not subject to bankruptcy risk. As a wholly state-owned entity - its capital can only be owned by the federal state - APETRA's assets and liabilities would revert to the state or another public entity in case of dissolution. Although APETRA is financially autonomous, dividend distributions to its sole shareholder, the Belgian state, are not possible because of its by-laws and public service role. Strategic Importance (Stronger) Oil is crucial for the domestic energy supply, representing the first source of energy consumed in Belgium. A European Directive requires each EU member state to hold strategic oil stocks. APETRA is the exclusive manager of this obligation for Belgium. The federal state, through its Ministry of Energy, sets quarterly the level of the contribution paid by oil companies to APETRA, which must, by law, cover APETRA's operating expenditure. Fitch believes that the Belgian state is highly motivated to provide support, and that it has the legal and financial means to enable APETRA to meet its debt service obligations on a timely basis, as highlighted by the EUR35 million exceptional subsidy granted in 2016. Control (Stronger) Given APETRA's public service role and the entity's consolidation into the general government accounts, the state exercises strong administrative, legal and financial oversight. The state approves APETRA's annual budget in addition to its multi-year plan. APETRA reports its debt levels and the value of its stocks to the state on a quarterly basis. Integration (Stronger) Relations between APETRA and the state are codified by law, by-laws, and a management contract. APETRA's debt is included in the general government's debt of Belgium as required by Eurostat. Even though its debt does not benefit from an explicit guarantee from the state, it benefits from direct access to the Belgium debt agency, which significantly mitigates its refinancing risk. In 2017, APETRA's stockholding obligation (compulsory strategic oil reserves) decreased 36% as compared with 2016 to 3.5 million tons due to an improvement in the naphta yield, which enters into the stockholding obligation formula. As of end-March 2017, APETRA's stockholding obligation was covered by the entity's oil stocks. The risk of refinancing is limited by APETRA's access to the Belgium debt agency, which will allow the entity to refinance debt at the respective maturity date. Despite a reduction in its oil stock requirements for 2017, APETRA's outstanding debt (incl. debt owed to the Belgium debt agency) is expected to remain stable in the medium term. APETRA's levy is collected on a monthly basis and is linked to the sales of each oil company and distributor in Belgium, resulting in stable cash inflows. The collections are enforced through state control. RATING SENSITIVITIES A downgrade could follow a similar rating action on the sovereign, an adverse change in the legal framework - which Fitch views as unlikely at present - and a weakening of expected support from the state. Conversely, positive rating action on Belgium would automatically be reflected in APETRA's ratings. Contact: Primary Analyst Nicolas Miloikovitch Analyst +33 1 44 29 91 89 Fitch France S.A.S. 60, rue de Monceau 75008 Paris Secondary Analyst Arnaud Dura Director +33 1 44 29 91 79 Committee Chairperson Guilhem Costes Senior Director +34 93 323 8410 Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria International Local and Regional Governments Rating Criteria - Outside the United States (pub. 18 Apr 2016) here Rating of Public-Sector Entities – Outside the United States (pub. 22 Feb 2016) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here Solicitation Status here#solicitation Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE here. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below