Moody's rates GazInvest notes Ba2

Moody's Investors Service said it has assigned a rating of Ba2 to $750 million of medium term notes issued by GazInvest Luxembourg S.A.

The medium-term notes issued by GazInvest have been used to fund a loan by J.P. Morgan Bank Luxembourg to the joint-stock bank of the gas industry Gazprombank (closed joint-stock company) established under the laws of the Russian Federation. The notes are term issuances listed on the Luxembourg Stock Exchange.

Moody's said the Ba2 rating of the notes is based primarily on the strength of the structure and the protection furnished by early amortization events; the ability of Gazprombank to make timely payments of interest and ultimate payment of principal on the loan; the effective segregation of GazInvest's rights to the Fiduciary Deposit Account and to the loan repayments afforded by Luxembourg law; and the charge and assignment of rights and interests by GazInvest to the trustee for the note holders under English law.

Also, the rating is based on triggers linked to the performance of the loan and to the ability of J.P. Morgan Bank Luxembourg to act as fiduciary.

Moody's said the proceeds of the notes are deposited into a Fiduciary Deposit Account in Luxembourg established with J.P. Morgan Bank Luxembourg and used to make the loan to Gazprombank. The notes are backed by GazInvest's interests in and rights related to the Fiduciary Deposit Account.

GazInvest will only account to the note holders for amounts equivalent to principal and interest (if any) received from J.P. Morgan Bank Luxembourg under the Fiduciary Deposit Agreement, and they in turn will only account to GazInvest for amounts received from Gazprombank under the loan agreement.

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