Moody's may cut Sibneft

Moody's Investors Service said it placed the Ba2 senior implied and Ba3 senior unsecured note ratings of OAO Siberian Oil Co. (Sibneft) under review for possible downgrade, reflecting increasing pressure on the liquidity of its 92% shareholder, Yukos Oil Co., and uncertainties over Sibneft's own position, should Yukos become insolvent.

Moody's said the review for possible downgrade reflects the potential impact on Sibneft of the rising financial demands being placed on Yukos. This pressure has been driven up in recent days by the decision of the Moscow Arbitration Court to freeze Yukos' assets at the request of the tax authorities who are claiming $3.5 billion in unpaid taxes from the company and by Monday's announcement that Yukos' $1 billion pre-export secured loan banking syndicate has given notice to the company of a potential event of default.

It is unclear, in Moody's view, how a default at Yukos would impact Sibneft, particularly as the ownership of Sibneft is in dispute and Yukos has little control over the company.

Moody's noted that the forthcoming tax judgment due on May 7 may prove decisive to Yukos' future.

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