This week's edition of Inside Credit focuses on the impact of falling oil prices throughout the capital markets. Featured stories include Fitch's downgrade of Venezuela and the 2015 Outlook for global oil and gas companies.

On Thursday, December 18, Fitch Ratings downgraded Venezuela's long-term foreign and local currency IDRs from 'B' to 'CCC'. The two-notch downgrade reflects the impact of sharp declines in international oil prices amid Venezuela's reduced external financing flexibility and rising macroeconomic instability.

'With oil expected to account for 92% of current external receipts and 50% of central government revenues this year, Venezuela is highly commodity dependent,' said Erich Arispe, Director of Latin American sovereigns. 'The country's capacity to respond to oil price shock is constrained by its relatively low level of international reserves, constraints to its operational liquidity, increasing macroeconomic instability, and limited sources of external financing.'

According to Fitch's 2015 Global Oil and Gas Outlook, most investment-grade oil and gas companies should be able to weather low oil prices due to their strong balance sheets and ample liquidity, provided the downturn is not sustained long-term. However, the outlook for the sector is Negative due to current prices falling below Fitch's base case price assumptions of $75/bbl for WTI and $80/bbl for crude.

'High yield issuers, particularly those in the 'B' range, may see more wobble given their thinner liquidity cushions and spottier capital markets access,' said Sean Sexton, Managing Director.

Other topics covered in this week's edition of Inside Credit include:

--The outlook for global sovereign ratings;

--Heightened risks to Russia's economy from interest rates and the rouble;

--Fitch's downgrade of France to 'AA';

--The results of the UK bank stress tests;

--Strong European leveraged loan issuance expected in 2015;

--Ratings in the Middle East and Africa will be dominated by oil prices, politics and policies in 2015;

--Australia's fiscal outlook weakened by falling commodity prices.

'Inside Credit' is a weekly snapshot of Fitch Ratings' noteworthy content, selected from all sectors and regions. To receive the weekly edition, distributed every Friday at 8am ET beginning in the new year, please sign up here: http://pages.fitchemail.fitchratings.com/InsideCreditSignUp/

The next edition of Inside Credit will be distributed on Friday, Jan. 9, 2015.

Additional information is available at 'www.fitchratings.com'.

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Fitch RatingsMedia Relations:Alyssa Castelli, +1 212-908-0540alyssa.castelli@fitchratings.com