Fitch ups Plynarensky Priemysel currency ratings to A

Fitch Ratings said it upgraded Slovensky Plynarensky Priemysel, AS's senior unsecured local and foreign currency ratings to A from BBB+.

The outlook is stable.

The upgrade reflects the company's track record of increasing profitability and free cash flow generation on the back of favorable domestic price regulation, post-privatization restructuring and a stable gas transit business where the credit profile of key counterparty OAO Gazprom (BB+) of Russia (BBB) improved over the last year, the agency said.

These strengths are balanced by Fitch's concerns over Plynarensky Priemysel's cash collection rates and decreasing domestic gas consumption in the last two years, mostly as a result of increased prices. Fitch is also concerned about the impact of widening market liberalization on the company - as Slovakia will become an open market on July 1, 2007 - and its total reliance on gas supplies from Gazprom.

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