Fitch lifts Synergy to stable

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

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

The outlook revision reflects an expectation that the improvements in the company's operating performance in the first half of 2016 should be sustainable and lead to a strengthening in its credit metrics, Fitch said, ensuring larger headroom under the B+ rating.

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

The ratings also are supported by expectations that Synergy's leverage will remain conservative, balancing its weak coverage metrics and lower profit margins than industry peers, Fitch said.

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