...Full Sovereign Alignment Rare: Fitch Ratings' approach to determining rating linkages between state-owned enterprises (SOEs) and their sovereigns is driven by the strength of strategic, legal and operational ties. In our EMEA corporate portfolio, only 15% of SOEs benefit from full rating alignment, with 48% rated on a standalone basis and 20% rated bottom-up from their standalone ratings. Strong Linkages Key: For full rating alignment, companies must usually be considered strategic to the state and be majority state-owned, the state should be intimately involved in setting the strategic direction of the entity (through appointing the board, approving budgets or funding capex), and significant financial assistance should be present (including a track record and/or the expectation of significant debt guarantees, subsidies, equity injections or other sources of state funding). Regional Support Regimes: EU law formally prohibits the provision of state financial assistance to competitive industries,...
