Fitch: negative view for RusHydro

Fitch Ratings said that while the recent accident at the Sayano-Sushenskaya hydropower station is clearly a negative credit development for JSC RusHydro (rated BB+ with negative view), formerly Federal Hydrogeneration Co., the full financial impact of the accident will depend on the Russian government's evolving response.

Following the accident, Russia's Energy Ministry indicated it may seek a rise in regulated tariffs to help compensate RusHydro for the capital expenditure required to rebuild the damaged plant, currently estimated at RUR40 billion, Fitch said.

Although the agency said it believes it is too early to assess the full credit impact of the accident, it is likely that RusHydro will experience some deterioration in its credit metrics as a result, even with favorable government intervention.

The outlook is likely to remain negative and will not necessarily continue to move in tandem with the sovereign outlook, the agency said.

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