Fitch affirms ‘stable outlook’ of Georgia's JSC Partnership Fund

Partnership Fund’s outlooks on the long-term IDRs are stable., 27 Mar 2014 - 13:52, Tbilisi,Georgia

Georgian financial officials are celebrating a positive affirmation by Fitch Ratings Agency, a global ratings agency.

Officials at state-owned shareholding company Georgia's JSC Partnership Fund's (PF) have welcomed the Fitch Ratings Agency rating, which classified it as having a "stable” outlook.

The agency affirmed PF’s long-term foreign and local currency Issuer Default Ratings (IDR) at "BB-” and Short-term foreign currency IDR at "B”. The outlooks on the long-term IDRs were also rated as stable.

The affirmation reflected the equalisation of PF's ratings with those of Georgia (BB-/Stable/B), said the agency.

Fitch believed key drivers of the rating included the expected reorganisation of PF into an investment unit of the future Georgia Sovereign Fund (SF) and develop private equity investments in viable economic projects, which would generate positive economic returns.

The statement released by the rating agency also stated PF successfully executed three investment projects in 2013 in real estate and agriculture, which generated an overall internal rate of return at 19.7 percent.

The PF is 100 percent owned by the state, which in Fitch's view demonstrated the Fund's strategic importance to Georgia. The Fund's mandate is to manage key national infrastructure corporations.

The state endowed PF with 100 percent stakes in Georgian Railway (Grail, BB-/Negative), JSC Georgian Oil and Gas Corporation (GOGC, BB-/Stable), JSC Georgian State Electrosystem (GSE), and JSC Electricity System Commercial Operator (ESCO).

Fitch said weaker links with the state or its downgrade would be negative for the PF.

"A downgrade of the sovereign or changes that would lead to dilution or reassessment of state support could exert downward pressure on the rating,” the statement read.