S&P lowers PGNiG

Standard &Poor's said it lowered the long-term corporate credit rating on PGNiG SA to BBB from BBB+ and placed the rating on CreditWatch with negative implications.

The downgrade and CreditWatch negative placement reflect PGNiG's widening losses on oil-indexed and dollar-based imported natural gas, S&P said.

PGNiG sells this gas on the domestic market under regulated prices below the imported cost, the agency said.

The mounting losses incurred for the regulated domestic gas supply business are therefore significantly weakening PGNiG's overall profitability and cash generation, S&P said.

Should domestic gas tariffs not be allowed to increase materially, PGNiG will likely post an operating loss for 2012, the agency said.

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