(The following statement was released by the rating agency)
Jan 23 - Fitch Ratings has affirmed Sukhoi Civil Aircraft JSC's (SCAC) Long-Term
Issuer Default Ratings (IDR) at 'BB' with a Stable Outlook. A full list of rating actions is at
the end of this release.
- State Support:
In line with Fitch's parent subsidiary linkage methodology, SCAC's ratings are driven by its
strong links to its ultimate majority shareholder, the Russian government ('BBB'/Stable). Due to
its shareholding, Fitch expects SCAC to continue to receive support from the Russian state via
additional equity injections over and above what has already been contributed. Any waning, or
perceived waning, of that support, is likely to lead to SCAC's ratings being further notched
down from those of the sovereign.
- Super Jet 100:
This relationship is underpinned by the strategic importance of the Super Jet 100 (SSJ 100)
aircraft to the state. The SSJ 100 is the only product SCAC has delivered to date, although a
business jet version has been launched and is scheduled to be delivered in 2014. SCAC can rely
on the support of the Russian state for additional equity injections over and above what has
already been contributed.
- Expected Emerging Market Demand Not Hindered by Indonesia Crash:
Other factors influencing the rating are the strong emerging market demand for the SSJ 100
(181 firm orders taken to date plus 75 options), which is unlikely to be negatively affected by
the May 2012 crash of the SSJ 100 demonstrator flight in Indonesia, the cause of which was pilot
error. Fitch notes that no orders have been cancelled as a result of the crash.
- Stable Outlook:
The Stable Outlook on the Long-Term IDR reflects that on the Long-Term foreign currency IDR
of the Russian Federation.
RATING SENSITIVITY GUIDANCE:
Future developments that could lead to positive or negative rating actions include:
- Change to Sovereign Ratings:
As SCAC's IDRs and Outlook are driven by those of the Russian Federation, any change to the
sovereign could prompt a review of the company's IDRs, National Ratings and Outlook.
- Degree of Sovereign Support:
The ratings and Outlook are also driven by the status of the support from the state. Any
strengthening of this support, such as a provision of written guarantees of SCAC's debt from the
Russian Ministry of Finance, would be likely to lead to a closer rating linkage. A weakening of
support, such as a reduction in the state's shareholding in SCAC, or a waning commitment to the
company's programmes, could lead to a widening of the rating gap between Russia and SCAC.
The rating actions are as follows:
Long-term IDR affirmed at 'BB'; Outlook Stable
Short-term IDR affirmed at 'B'
Long-term local currency IDR affirmed at 'BB'; Outlook Stable
Short-term local currency IDR affirmed at 'B'
Foreign currency senior unsecured rating affirmed at 'BB'
Local currency senior unsecured rating affirmed at 'BB'
National Long-term rating affirmed at 'AA-(rus)'; Outlook Stable
National Short-term rating affirmed at 'F1+(rus)'