Moody's: PGNiG view to stable

Moody's Investors Service said it amended the outlook on the Baa3 rated €679 million eurobonds of Poland's PGNiG Finance BV to stable from negative.

The eurobonds are guaranteed by the issuer's parent company, Polskie Gornictwo Naftowe i Gazownictwo Spolka Akcyjna (PGNiG).

Moody's said the stabilization of PGNiG's rating reflects the ongoing operating and financial performance improvements at the company on the back of steadily increasing gas volumes, higher domestic gas prices and cost-cutting measures. Moody's believes that the planned partial privatization of the company scheduled for 2005 may have a further positive impact on the company's operations, disclosure and governance, and foresees that PGNiG's performance may continue to compare favorably with its Western European regulated gas company peers which could enhance its rating level over the medium term.

At the same time, however, Moody's noted that PGNiG faces several near-term challenges which need to be overcome before any improvement in the rating can be foreseen, and could have a potentially detrimental rating impact.

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