DOHA: Fitch Ratings has affirmed Nakilat Inc’s senior bonds and the junior bonds. The $850m series A senior secured bonds due in 2033 has been affirmed at ‘A+’ with stable outlook. The $300m series A subordinated second priority secured bonds due 2033 has been affirmed at ‘A’, also with stable outlook.
The affirmations reflect the stable operating and financial performance of Nakilat and its close operational and strategic ties to the state of Qatar (AA/Stable), as assessed by Fitch’s Parent and Subsidiary Linkage (PSL) criteria, the ratings agency noted yesterday.
“Qatar is heavily dependent on hydrocarbon revenues and Nakilat is a vital component of the hydrocarbon value chain as it provides vessels for exporting LNG. Consequently, we believe that despite not having explicit parent guarantees, the project is strategically and operationally important to the sovereign and therefore is rated two notches below Qatar’s sovereign rating.”, the Fitch said.
The senior bond rating is aligned with the ‘A+’ rating for Ras Laffan Liquified natural Gas Company Ltd II and 3 (Rasgas)’s senior debt. Rasgas is a Qatari LNG producer. Like Nakilat, Rasgas is viewed as an essential part of the Qatari LNG supply chain and is also assessed under the PSL criteria. Corporate and bank peers include Qatari telecoms company Ooredoo, which benefits from strong operational strategic links and moderate legal ties. Its rating is aligned with that of Nakilat. Qatar National Bank is rated at ‘AA-’, only one notch below the rating of Qatar reflecting the systemic risk posed by the banking sector as well as the flag ship status of the bank.
The parent/subsidiary relationship with Qatar is established through the strong representation of the government on Nakilat Inc’s parent company QGTC’s board and the vertical integration of Nakilat into the LNG supply chain, with revenues coming from majority state-owned LNG producers Rasgas and Qatargas.
Operational ties are established through the strong interdependence between the LNG upstream projects and Nakilat.
The availability of LNG tankers is essential for the shipment of LNG to the consuming markets. Nakilat provides the majority of LNG vessels serving Qatargas 2, 3 and 4 as well as one large vessel to Rasgas.
Qatar’s rating is largely underpinned by the financial strength it has due to the LNG value chain. Under Qatar Petroleum and through its Qatargas and RasGas operations, the LNG produced in Qatar is sold to customers around the world typically via long-term contracts, which provides stable revenues.
Nakilat provides the essential transportation link in this value chain. The entire value chain enjoys strong sponsorship from Qatar. This is reflected in the high profile of Nakilat’s parent company QGTC’s board composition, with representatives from Qatar Petroleum, the state-owned oil-and-gas company and the government.
In addition QGTC is developing into a globally recognised shipping company with the extension of its vessel fleet, the operation of the Erhama Bin Jaber Al Jalahma Shipyard and offering a comprehensive range of marine services operating in Qatari waters. This expands and strengthens Qatar’s marine industrial capabilities in the Port of Ras Laffan and together with the Qatarisation of its workforce develops the local knowledge and skill base, which is a strategic goal of the state.
Fitch noted that Nakilat’s 2015 revenues increased marginally (+0.3 percent) from 2014 reflecting the availability-based nature of the project and in particular the absence of volume and market risk that affects the upstream producers’ revenues.
The debt service coverage ratio (March 2015-April 2016) increased slightly to 1.40x from 1.39x from the previous year. This reflects Nakilat’s strong operating performance with availability of over 99 percent resulting in no off-hire reduction to revenue. Fitch expects debt metrics to remain solid, helped by the implementation of some operating cost savings in future as the vessel management is to be transferred in house.
The Peninsula
DOHA: Fitch Ratings has affirmed Nakilat Inc’s senior bonds and the junior bonds. The $850m series A senior secured bonds due in 2033 has been affirmed at ‘A+’ with stable outlook. The $300m series A subordinated second priority secured bonds due 2033 has been affirmed at ‘A’, also with stable outlook.
The affirmations reflect the stable operating and financial performance of Nakilat and its close operational and strategic ties to the state of Qatar (AA/Stable), as assessed by Fitch’s Parent and Subsidiary Linkage (PSL) criteria, the ratings agency noted yesterday.
“Qatar is heavily dependent on hydrocarbon revenues and Nakilat is a vital component of the hydrocarbon value chain as it provides vessels for exporting LNG. Consequently, we believe that despite not having explicit parent guarantees, the project is strategically and operationally important to the sovereign and therefore is rated two notches below Qatar’s sovereign rating.”, the Fitch said.
The senior bond rating is aligned with the ‘A+’ rating for Ras Laffan Liquified natural Gas Company Ltd II and 3 (Rasgas)’s senior debt. Rasgas is a Qatari LNG producer. Like Nakilat, Rasgas is viewed as an essential part of the Qatari LNG supply chain and is also assessed under the PSL criteria. Corporate and bank peers include Qatari telecoms company Ooredoo, which benefits from strong operational strategic links and moderate legal ties. Its rating is aligned with that of Nakilat. Qatar National Bank is rated at ‘AA-’, only one notch below the rating of Qatar reflecting the systemic risk posed by the banking sector as well as the flag ship status of the bank.
The parent/subsidiary relationship with Qatar is established through the strong representation of the government on Nakilat Inc’s parent company QGTC’s board and the vertical integration of Nakilat into the LNG supply chain, with revenues coming from majority state-owned LNG producers Rasgas and Qatargas.
Operational ties are established through the strong interdependence between the LNG upstream projects and Nakilat.
The availability of LNG tankers is essential for the shipment of LNG to the consuming markets. Nakilat provides the majority of LNG vessels serving Qatargas 2, 3 and 4 as well as one large vessel to Rasgas.
Qatar’s rating is largely underpinned by the financial strength it has due to the LNG value chain. Under Qatar Petroleum and through its Qatargas and RasGas operations, the LNG produced in Qatar is sold to customers around the world typically via long-term contracts, which provides stable revenues.
Nakilat provides the essential transportation link in this value chain. The entire value chain enjoys strong sponsorship from Qatar. This is reflected in the high profile of Nakilat’s parent company QGTC’s board composition, with representatives from Qatar Petroleum, the state-owned oil-and-gas company and the government.
In addition QGTC is developing into a globally recognised shipping company with the extension of its vessel fleet, the operation of the Erhama Bin Jaber Al Jalahma Shipyard and offering a comprehensive range of marine services operating in Qatari waters. This expands and strengthens Qatar’s marine industrial capabilities in the Port of Ras Laffan and together with the Qatarisation of its workforce develops the local knowledge and skill base, which is a strategic goal of the state.
Fitch noted that Nakilat’s 2015 revenues increased marginally (+0.3 percent) from 2014 reflecting the availability-based nature of the project and in particular the absence of volume and market risk that affects the upstream producers’ revenues.
The debt service coverage ratio (March 2015-April 2016) increased slightly to 1.40x from 1.39x from the previous year. This reflects Nakilat’s strong operating performance with availability of over 99 percent resulting in no off-hire reduction to revenue. Fitch expects debt metrics to remain solid, helped by the implementation of some operating cost savings in future as the vessel management is to be transferred in house.
The Peninsula
