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The Russia-Ukraine war will bring benefits for GCC oil and gas producers but poses some risks to Turkish companies in terms of credit quality erosion, according to Moody’s.
In a sector-in-depth update on corporates, the ratings agency said none of the 56 GCC, African and Turkish companies rated by Moody’s will face material credit quality erosion under its baseline scenario for the conflict, that being that global growth slows but does not stall.
However, under its downside scenario, a global recession caused by escalation of the conflict, 14 percent of those companies will be exposed due to high commodity prices, while 14 percent will benefit, Moody’s said.
“Overall, companies in Turkey are much more vulnerable to credit quality erosion under our downside scenario than those we rate in Africa and GCC,” said the update. “By contrast, companies in the GCC are more likely to benefit in this scenario than those based in Turkey and Africa.”
Companies with direct exposure to Russia or Ukraine, which including glass manufacturer Sisecam, Barloworld Limited, Caterpillar Inc and mobile phone operator Turkcell.
Companies that have debt maturities in the next 12 months and could be harmed by debt capital disruption include Kuwait Projects Company Holding and Petkim Petrokimya Holding AS, Moody’s said.
(Writing by Imogen Lillywhite; editing by Seban Scaria)
imogen.lillywhite@lseg.com
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