S&P: TNK-BP remains on positive watch

Standard & Poor's said TNK-BP International Ltd.'s BBB- long-term and A-3 short-term corporate credit ratings remain on CreditWatch, where they were placed with positive implications in October 2012.

The ongoing CreditWatch placement follows TNK-BP's acquisition by OJSC Rosneft. On March 21, Rosneft acquired a 50% stake in TNK-BP from the Russian consortium AAR for $27.73 billion and another 50% from BP plc for $16.65 billion in cash and 12.84% of Rosneft's treasury shares, S&P said.

The ongoing CreditWatch placement reflects a similar CreditWatch on Rosneft, the agency said.

The ratings on TNK-BP are now aligned with Rosneft's ratings to reflect that Rosneft is the sole owner of TNK-BP, S&P said, and that TNK-BP is a major Rosneft subsidiary.

TNK-BP's key credit strengths include the company's large export-focused upstream operations, vertical integration, sound profitability, better free cash flow generation than peers and prudent financial policies, the agency said.

These strengths are significantly constrained by risks related to operating in Russia, notably heavy taxes and cost inflation, S&P said.

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