Energy, EU – Baltic States, Lithuania, Rating, Transport

Fitch removed Orlen from negative watch, which indicates that a downgrade is likely within a year. The service gave Orlen's long-term "BB+" ratings a "negative" outlook, which means a cut is likely later than 12 months from now, reports LETA/Bloomberg.

Fitch had placed Orlen on watch in September, when it said the company could breach the loan covenants at year-end.

"The rating action reflects PKN's reduced risk of a material deterioration of its credit profile," Fitch said in a statement today. "The Negative Outlook reflects Fitch's view that the company's credit ratios will remain under pressure in 2010," the rating company said, adding that most of refiners it rates have a negative outlook, "mainly due to the depressed margin environment."

In 2008, Orlen's ratio of debt to earnings exceeded the maximum set by banks in its debt covenants. In exchange for an undisclosed fee the company's creditors gave it until the end of 2009 to bring the indicator back into line. The stronger zloty as well as increased working capital helped Orlen reduce debt at the end of 2009 by 18 percent from a year earlier.