Moody's could cut PGNiG

Moody's Investors Service said it placed the Baa1 issuer rating of Polskie Gornictwo Naftowe i Gazownictwo SA (PGNiG) and the Baa1 senior unsecured rating of its guaranteed subsidiary PGNiG Finance AB (publ) on review for downgrade.

Concurrently, Moody's placed the long-term senior unsecured rating of provisional Baa1 on the €1.2 billion euro medium-term note program of PGNiG Finance AB (publ) on review for downgrade.

Moody's said the review for downgrade is prompted by PGNiG's weak operational performance in the first half of 2012 in conjunction with a higher debt burden, which Moody's said it believes will likely result in deterioration in the group's credit metrics from levels in 2011, when it generated retained cash flow/debt and funds from operations/debt in excess of 50% and 63%, respectively, and below the guidance given for the current rating category.

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