Fitch rates MOL notes BBB-

Fitch Ratings said it assigned an expected BBB- rating to MOL Hungarian Oil and Gas plc's upcoming issue of euro-denominated notes.

The notes are expected to be issued by MOL for general corporate purposes, including the restructuring of its existing portfolio of debt, Fitch said.

The outlook revision reflects a view that MOL should be able to maintain a conservative financial profile with leverage within guidelines, the agency said, despite lower projected oil prices in 2016 and moderating refining margins.

MOL’s net debt may increase in 2016, but its free cash flow deficit is likely to be moderate and manageable, unlike that of many other integrated oil players, Fitch said.

This is due to expected strong downstream performance, a fairly low share of higher-cost upstream assets in its portfolio and considerable capital expenditure reduction, the agency said.

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