S&P ups Sovcomflot

S&P said it upgraded Sovcomflot and its subsidiary SCF Capital DAC to BBB- from BB+ and its senior unsecured notes to BB+ from BB.

“Sovcomflot used the proceeds of a minority initial public offering (IPO) executed in 2020, plus its strong operating performance, to strengthen its balance sheet. This will help to protect the improved credit metrics against softening tanker rates while the company will continue to make prudent investments in new ships. In 2020, Sovcomflot increased its S&P Global ratings-adjusted EBITDA to $952 million from $881 million in 2019, in line with our July 2020 forecast,” the agency said in a press release.

“Sovcomflot's increasing exposure to contract-based services and its prudent financial policy and risk tolerance underpin our upgrade. In our view, the company's exposure to the more predictable industrial segment will help it turn its EBITDA strength into annual lasting value of more than $800 million,” S&P said.

The outlook is stable.

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