Page 21 - RusRPTApr20

“Current prices in Europe and Asia rarely cover the half-cycle cash costs (that include variable operating costs and transport to Europe) of natural gas and LNG suppliers, including Gazprom and US producers, and are therefore unsustainable,” Fitch said. “We assume the Dutch TTF and UK NBP gas prices in Europe will gradually recover to $5.5/mcf over three to five years, broadly corresponding to the full-cycle costs of US producers, including shipping to Europe and capex. We assume the US Henry Hub price to recover to $2.5/mcf in the long term.”
But gas prices will remain low in the meantime over the next two years, according to Fitch, due to weak demand for LNG in China, high volumes of gas in European storage and commissioning of new LNG capacity, albeit at slower pace than in 2016-2019.
“Our ratings will be driven by issuers' expected credit profiles in 2020-2023 (assuming their liquidity remains sufficient), rather than when prices trough. This is in line with our "rating-through-the-cycle" approach,” says Fitch. “We do not anticipate that this revision of oil and gas prices will trigger portfolio-wide negative rating actions, but we will assess the credit impact case by case. High-yield issuers are more exposed, particularly those with high liquidity and refinancing risks, given tough capital and asset sale markets.”
2.8 Putin’s introduces coronavirus measures
In a televised an address to the Russian people on March 24 Russian President Vladimir Putin laid out the immediate measures to protect and support the population that included:
I Holidays and rescheduling
The week starting 30 March is to be a holiday for all industries except for the most essential and infrastructure services.
The MOEX announced that it will be, "keeping all its markets open from 30 March to 3 April", but that trading hours will be announced later.
President Putin also announced the plebiscite for the changes in the Constitution would be postponed from 22 April to an unannounced later date when the extent of the problem with the virus would be more visible.
II Social policy extension
All individual social benefits that would ordinarily expire in the next six months are to be automatically extended, thus waiving the need to provide the typically required documents.
Special payments to World War II veterans are to be front-loaded and paid in April.
Starting April, each family eligible for maternity capital is to receive an additional RUB 5k per child aged three or below.
Sick leave payments are to be calculated on the basis of at least the minimum living wage, a measure that is to remain in place at least until the end of the year, and which is to be considered for extension after that.
The maximum amount of unemployment benefit is to be extended to the minimum living wage of RUB 12.3k from approximately RUB 8k.
There are to be several borrower protection measures introduced for individuals. i) If the borrower suffers a loss of one third of his or her income or
21 RUSSIA Country Report April 2020 www.intellinews.com