Moody's may lift Transneft

Moody's Investors Service said it placed the ratings on OAO AK Transneft on review for possible upgrade following an earlier decision by Moody's to place Russia's sovereign ratings on review for possible upgrade.

The company's Baa1 long-term local currency issuer rating and its Baa3 long-term foreign currency issuer rating are under review.

As a government-related issuer, Transneft's ratings benefit from expected government support, which is a function of the high support and low dependence assumptions made by Moody's as part of its joint default analysis for government-related issuers.

Moody's added that - given unchanged assumptions on government support and dependence, as well as Transneft's baseline credit assessment of 4 - a one-notch upgrade of the Russian sovereign rating would result in a two-notch upgrade of Transneft's local currency rating, while the foreign currency issuer rating would remain constrained by the sovereign ceiling, as determined by its methodology.

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