...October 30, 2023 - Following two consecutive years of underperformance, we expect that Uzbekneftegaz's (UNG)'s leverage will remain high in 2023-2024, as the ramp up of gas-to-liquids (GTL) operations continues while interest expenses will roughly double in 2023 and remain high in 2024-2025. This will result in UNG posting funds from operations (FFO) to debt of 7%-12% in 2023 and 10%-14% in 2024. - At the same time, we believe the sizable investments required to maintain gas production will continue to weigh on cash flow generation. - The company's liquidity will remain constrained for the next two years, with large maturities of about $550 million per year and increasing maintenance capital expenditure. - We therefore lowered our long-term issuer credit rating on UNG and our issue rating on its bond to 'B+' from '##-'. - The stable outlook balances our expectation of limited prospects for material deleveraging over the next 12-24 months and our view of extremely high likelihood of government...
