S&P lowers Gazprom

Standard & Poor's ratings said it lowered the foreign-currency ratings on Gazprom OAO to BB+/B from BBB-/A-3, along with its local-currency ratings to BBB-/A-3 from BBB/A-2.

The outlook is negative.

The downgrade follows the recent downgrade of Russia’s sovereign ratings because its monetary policy flexibility has become more limited and its economic growth prospects have weakened, S&P said.

Although the agency said it thinks that, on a stand-alone basis, Gazprom could withstand a sovereign default, Fitch said it sees a high likelihood of negative government intervention on the sovereign’s hypothetical path to default.

Gazprom's stand-alone credit profile is still assessed at BBB- and the likelihood of extraordinary support for Gazprom as extremely high based on Gazprom's critical role for the government, S&P said.

Companies with strong links to the government cannot be rated higher than the sovereign, according to the agency’s criteria, S&P added.

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