BAKU, Azerbaijan, December 14. Fitch Ratings has upgraded Uzbek UzAuto Motors JSC’s (UAM) Long-Term Issuer Default Rating (IDR) and senior unsecured rating to 'BB-' from 'B+',Trend reports via Fitch.
The outlook on the long-term IDR is stable. The recovery rating remains at 'RR4'.
The upgrade follows the revision of socio-political and financial implications of a UAM default to 'Strong' from 'Moderate'.
“We have therefore equalized its rating with that of sovereign in line with Fitch's 'Government-Related Entities Rating Criteria'(GRE). Fitch continues to assess UAM's Standalone Credit Profile (SCP) at 'b',” the source said.
The revision of socio-political implications of a UAM default to 'Strong' reflects Fitch’s view of a material negative socio-political impact given UAM's large revenue and contribution to Uzbekistan's economy.
In addition, UAM, together with related parties, has a rather large workforce in the country of about 28,000 staff, which in case of default will increase the unemployment rate in the country.