Fitch puts EP Infrastructure on watch

Fitch Ratings said it placed EP Infrastructure, as' (EPIF) BBB- long-term issuer default rating and senior unsecured rating on rating watch negative.

“The RWN mainly reflects the rising risks we see at eustream (BBB+/RWN; stand-alone credit profile (SCP) bbb), which typically represents around 40% of EPIF's proportional group EBITDA. These risks relate to the increased and rising risks to Gazprom's (LT IDR: B/RWN) willingness and ability to honor its obligations under its ‘ship-or pay’ gas transit contracts with eustream, which accounts for around two- thirds of eustream's transported volumes. This follows tightening sanctions on Russia and its corporates and Russia's own restrictions since its military invasion of Ukraine last week as well as Europe's growing desire to reduce its energy imports from Russia,” Fitch said in a press release.

The agency said it plans to resolve the RWN once it has better long-term visibility of the transit business and EPIF's target financial profile, assuming significant changes in the European gas market. This could take longer than six months.

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