Fitch: Synergy to negative

Fitch Ratings said it revised the outlook on PAO Synergy to negative from stable.

The agency also said it affirmed the company’s long-term foreign- and local-currency issuer default ratings at B+ and national long-term rating at A-(rus).

The negative outlook reflects an expectation that increased competition from lower priced illegal and regional vodka producers will persist in 2016 amid impaired consumer spending in Russia, Fitch said.

The outlook also captures diminished headroom under the B+ rating due to the company’s stretched credit metrics in 2015 and deteriorated financial flexibility relative to previous projections, the agency said.

The ratings are underpinned by Synergy’s strong position in the Russian alcoholic beverages market, which is supported by a portfolio of national and regional brands, as well as a more developed distribution platform and larger scale of operations than most competitors, Fitch said.

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