Moody's lowers Sovcomflot

Moody's Investors Service said it downgraded Sovcomflot JSC's corporate family rating to Ba2 from Ba1 and its probability of default rating to Ba2-PD from Ba1-PD.

Moody's also said it downgraded the company's issuer rating to Ba3 from Ba2 and the senior unsecured rating on SCF Capital Ltd.'s $800 million eurobond to Ba3 (LGD 5, 85%) from Ba2.

The outlook is stable.

As Sovcomflot is a 100% state-owned company, Moody's said it applies its government-related issuer rating methodology in determining the company's corporate family rating.

The company's financial metrics remain weak and do not demonstrate an improvement trend, the agency said.

But, Sovcomflot has a solid business profile thanks to its strong customer base, diversification into the gas transportation and offshore businesses and conservative fleet management with only limited exposure to the spot tanker market, Moody's said.

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