Moody’s revises Repsol, Talisman to negative

Moody's Investors Service said it affirmed Talisman Energy Inc.'s Baa3 senior unsecured and Prime-3 commercial paper ratings.

Separately, the agency affirmed Repsol SA's Baa2 issuer rating and the Baa2/provisional Baa2 senior unsecured long-term debt and Prime-2/provisional Prime-2 short-term ratings of Repsol's guaranteed subsidiary, Repsol International Finance BV.

The outlooks for both Talisman and Repsol were changed to negative.

These actions are in response to Repsol's announcement that it agreed to acquire Talisman for $8.3 billion.

"The affirmation of Talisman's ratings with a change in outlook to negative is in line with Repsol's negative outlook. Parent support will be a key issue for Talisman's rating," Moody’s senior vice president Terry Marshall said in a news release.

"Absent a parent guarantee, the Talisman debt is likely to remain rated one notch below Repsol's. If Talisman's debt remains unguaranteed post-closing and audited financial statements are not provided for Talisman, Moody's would withdraw the ratings on Talisman's debt."

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