Fitch lowers Petrol AD

Fitch Ratings said it has downgraded Pretol AD's issuer default rating and the senior unsecured rating for its €100 million notes due in 2011 to CCC from B-.

Both ratings have been removed from rating watch negative, Fitch said, noting that it has assigned a negative outlook to the long-term issuer default rating.

The downgrades were prompted by a sizeable share repurchase undertaken by Petrol AD in Q208, increased financial leverage and Fitch's concerns about corporate governance, according to the agency, which said that concern about diminished earnings, due to an asset disposal of an important part of the petrol station network, and large losses on derivatives transactions have also negatively affected Petrol's business and financial profile.

The recovery rating on the notes is affirmed at RR4, the agency said.

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