Moody's affirms Gazprom

Moody's Investors Service said it affirmed the ratings on OJSC Gazprom, following an earlier announcement that it signed legally binding documents for the purchase of a 72.7% stake in OAO Sibneft for a consideration of $13.1 billion.

Gazprom's ratings remain under review for possible upgrade following Moody's decision to place the ratings of the Russian Federation on review for possible upgrade.

Moody's said its decision to affirm Gazprom's ratings is based on the rating agency's view that the potential transaction will strengthen the group's business risk profile, as Gazprom is purchasing a majority interest in one of Russia's most efficient integrated oil companies, with high-quality cash-generative assets.

Moody's noted at the same time that the potential transaction is likely to weaken Gazprom's financial profile over the short-term, but expects the acquisition to be partially refinanced through proceeds from Rosneftegaz, to be transferred to the company by year-end.

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