Fitch cuts Sovcomflot

Fitch Ratings said it has downgraded OAO Sovcomflot's long-term issuer default rating to BB- from BB.

Fitch has also downgraded SCF Capital Ltd.'s senior unsecured notes, which are guaranteed by OAO Sovcomflot, to BB- from BB.

The outlook on the long-term issuer default rating is negative.

The downgrade reflects Fitch's expectations that Sovcomflot is likely to continue to underperform its previous forecasts over 2013-2015 with its leverage and coverage metrics breaching its previous negative rating guidelines.

The negative outlook reflects the agency's view that the net leverage metrics in 2013-2014 will remain weaker than its current negative rating guideline of 6x as well as its perception of the uncertainty around the IPO's timing and exact amount of the proceeds to be reinvested in the company and also the market recovery, the agency noted.

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