S&P rates Tengizchevroil, bonds BBB

S&P said it assigned its BBB long-term corporate credit rating and kzAA+ Kazakhstan national scale rating to Tengizchevroil LLP.

The outlook is negative.

The agency also assigned its BBB issue credit rating to the company's proposed $1 billion senior secured bond to be issued by subsidiary Tengizchevroil Finance International Ltd. and guaranteed by Tengizchevroil.

S&P said the ratings reflect its view that the strengths of Tengizchevroil’s underlying business largely mitigate the expectation of strongly negative free operating cash flow in the next several years as the company undertakes a major investment project.

The ratings also incorporate the agency’s anticipation of ongoing and extraordinary support to Tengizchevroil from its largest shareholder, Chevron, which enhances Tengizchevroil’s credit profile.

The BBB rating on the proposed bond reflects Tengizchevroil’s full and unconditional guarantee of the instrument.

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