S&P rates Gazprom bonds BBB

Standard & Poor's said it assigned a BBB long-term issuer rating to Gazprom Capital OOO, a 100%-owned finance subsidiary of OAO Gazprom.

The outlook is stable.

S&P also said it assigned a BBB rating to Gazprom Capital's ruble bonds, which it is issuing under the surety of the parent. The long-term ratings on Gazprom Capital and on its proposed ruble bonds are equalized with the ratings on OAO Gazprom.

OAO Gazprom uses Gazprom Capital to issue ruble bonds to finance the Gazprom group's general needs, S&P said.

Gazprom Capital and its proposed bonds were rated at the level of the parent because Gazprom has a very strong incentive to provide timely support to Gazprom Capital if needed, the agency said.

The subsidiary shares a similar name with the parent and is strongly associated with the parent in the eyes of the market, S&P said.

The ratings also reflect the company's position as the world's largest gas producer with vast reserves, massive production, vertical integration into pipeline transportation and solid financial metrics, the agency said.

These strengths are offset by exposure to commodity price fluctuations, growing competitive pressures and large investment appetites, S&P said.

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