| Moody's assigns (P)Baa2 rating to Lukoil's Eurobond issue |
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27/10/2009 10:40 (105 Day 07:47 minutes ago) | |||||
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The FINANCIAL -- Moody's Investors Service has assigned a provisional rating of (P)Baa2 to the upcoming Eurobond issue by OAO LUKOIL ("Lukoil").
The issuer of the notes is LUKOIL International Finance B.V., an indirect wholly owned subsidiary of OAO LUKOIL . The
The notes will be general unsecured and unsubordinated obligations of LUKOIL International Finance B.V., ranking senior to all present and future subordinated obligations and equal in right of payment to all present and future unsecured and unsubordinated obligations. With OAO LUKOIL guaranteeing the issue the notes holder are relying solely on LUKOIL 's credit quality to service and repay the debt.
Upon a conclusive review of the transaction and associated documentation, Moody's will endeavour to assign a definitive rating to the Notes issue. A definitive rating may differ from a provisional rating. It is anticipated that the maturity of the Notes will not exceed ten years. The proceeds are expected to be used by LUKOIL for general corporate purposes, including the refinancing of existing indebtedness.
Despite a major deterioration of market conditions for oil and gas players globally toward the end of 2008 and weak oil prices during 1H 2009, LUKOIL 's 2008 operational and financial performance has remained robust. Based on current expectations for LUKOIL 's 2009 operating performance and cash flow generation, the agency believes that the company enjoys sufficient financial flexibility to accommodate the additional debt within the current Baa2 rating.
The last rating action for LUKOIL was on May 24, 2007 when Moody's assigned Baa2 ratings with a Stable Outlook to a previous LUKOIL Eurobond issue.
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