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proportional representation system with a zero threshold, Fitch commented. However, the rating agency does not expect a shift in policy direction, with the IMF programme (likely to be renewed in 2020), Nato accession talks, and maintenance of a close relationship with the EU providing solid anchors.
8.4.1​ ​International ratings - specific details of rating actions corp/regional etc
S&P upgrades Georgian Oil and Gas Corporation rating to BB-
S&P Global has raised its rating on Georgian Oil and Gas Corporation's (GOGC) long-term debt by one notch to BB-/stable. The move was in response to past action on the Georgia sovereign rating but also reflected diversification achieved by the construction of a gas-fired plant.
GOGC has the status of National Oil Company, protects state interests in the Production Sharing Agreements signed with investors and is the owner of the main gas pipeline system of Georgia.
It is viewed by the government of Georgia as critical to its national energy policy. GOGC is actively pursuing diversification of its business activities through constructing and operating gas-fired thermal power plants.
S&P said that the rating action on GOGC followed similar action on Georgia. It also reflected the rating agency’s view of a very high likelihood of extraordinary state support for the company and its unchanged stand-alone credit profile (SACP) of 'b+'.
In the base case for 2019, S&P currently assumed a temporary deterioration in credit metrics, spurred by higher gas purchasing costs versus flat domestic social gas prices and a peak in capex.
For 2019, the rating agency anticipated debt to EBITDA will peak at 4.7x and FFO to debt will decline to 16% (all ratios are on a gross basis). Still, it said it believed the launch of the Gardabani II power station in late 2019 should facilitate a quick recovery in credit metrics. The plant would contribute about GEL70mn ($26mn ) to GOGC's EBITDA starting from 2020, which should allow debt to EBITDA of below 4.0x and FFO to debt exceeding 20% from the same year.
8.5 ​Fixed income
8.5.1​ ​Fixed income - bond news
Georgian Oil and Gas Corporation to borrow €300mn by issuing international bonds
The Georgian Oil and Gas Corporation (GOGC), one of the largest state-owned enterprises in Georgia, plans to borrow €300mn in April by issuing bonds on the international financial market, according to a Business Media report citing a company press release.
“Full redemption of $250mn bonds will be made," a statement, released by GOGC and the Georgian Ministry of Economy, read.
GOGC issued 5-year eurobonds worth $250mn on the London Stock Exchange in 2016 to refinance a previous same-sized issue in 2012.
The funds raised under the April 2020 eurobond move will be partly used for the construction of the Gardabani 3 thermal power plant.
41​ GEORGIA Country Report​ February 2020 ​ ​www.intellinews.com