Moody's upgrades Sinek

Moody's Investors Service said it upgraded to Baa3 from Ba1 the rating of OAO Svyazinvestneftekhim (Sinek), a 100% state-owned investment holding company of the Republic of Tatarstan, and converted the company's corporate family rating into a long-term issuer rating. Concurrently, Moody's upgraded to Baa3 from Ba1 the senior secured rating on the $250 million loan participation notes issued by Edel Capital SA for the sole purpose of financing a loan, guaranteed by Tatarstan, to Sinek Capital SA, a subsidiary of Sinek. The outlook is stable.

The agency said the upgrade was prompted by the upgrade of Tatarstan's issuer rating to Baa3 from Ba1 with a stable outlook and reflects the company's history of maintaining a sizable portfolio of assets that consist of key companies in which Tatarstan has either a controlling or a blocking stake, including a 36% stake in OAO Tatneft and a 25% stake in OJSC Nizhnekamskneftekhim. As of the end of June, the market value of this portfolio was estimated at around $7 billion and provided more than 20 times coverage of Sinek's total debt obligations, according to Moody's.

Sinek's ratings remain constrained by the very high concentration of the company's investment portfolio in the oil production and petrochemical sectors, which exposes it to oil price volatility, the agency said.

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