Fitch Ratings has assigned Bharat Petroleum Corporation (BPCL, BBB-/stable) CHF 200 million 3% senior unsecured bonds due December 2019 a final rating of 'BBB- '

The assignment of the final rating follows a review of the final documentation, materially conforming to the draft documentation previously received. The final rating on the notes is the same as the expected rating assigned on Feb. 26, 2014. The notes are rated at the same level as BPCL's Issuer Default Rating (IDR) as they represent direct, unconditional, and unsecured unsubordinated obligations of the company.

BPCL's IDR is equalised with that of India (BBB-/Stable)-which owns 54.9% of the oil company - to reflect the strong strategic and operating linkages between the two entities based on Fitch's Parent Subsidiary Linkage Criteria. The prices of some of the key products marketed by BPCL-retail diesel, public distribution kerosene and household LPG-are regulated by the state.

While the upstream discount and the budgetary support mitigate the impact of the regulated pricing on BPCL's profitability, the delay in receipt of the subsidies impacts the working capital position of the company, and consequently its debt position and finance costs.

In FY13, BPCL had net leverage (net debt/EBITDA) of 3.8x (FY12: 4.4x) and interest cover (EBITDA/gross interest) of 2.6x (FY12: 2.1x) on a consolidated basis. The stand-alone debt as at end-December 2013 was Rs 167 billion compared with Rs 238 billion at end-March 2013. Fitch expects BPCL to maintain its credit metrics over the next three to four years at a level similar to that seen in the past.

Shares of the company declined Rs 9.95, or 2.21%, to trade at Rs 439.35. The total volume of shares traded was 104,747 at the BSE (Thursday).