Fitch Ratings has assigned ORLEN Capital AB €500m bonds due 2021 a final senior unsecured rating of 'BBB-'. The bonds are unconditionally and irrevocably guaranteed by Polski Koncern Naftowy Orlen S.A.
The bonds are rated at the same level as PKN's Issuer Default Rating (IDR) to reflect the guarantee and their ranking as senior unsecured obligations of the company.
PKN's ratings reflect the company's business diversification with operations in the refining, petrochemical and fuel retail sectors, its strong position in the Polish market and an improved financial profile with funds from operations (FFO) net adjusted leverage of 2.5x in 2013 (including adjustments for inventory-holding losses and sales of obligatory reserves of crude oil). The ratings are mainly constrained by the cyclicality of the refining and petrochemical operations. Reported EBITDA under LIFO in 1Q14 was PLN1bn, representing a 5% yoy increase, mainly on the back of strong results in the retail and petrochemical segments.