Moody's ups TNK-BP outlook to positive

Moody's Investors Service said it changed the outlook to positive from stable on TNK-BP's ratings, including TNK-BP International Ltd.'s Ba1 long-term corporate family rating, TNK-BP Finance SA's Ba2 $5 billion senior unsecured debt issuance program and the Ba2 senior unsecured rating on JSC Tyumen Oil Co.'s $700 million loan participation notes due 2007.

Moody's said the change of outlook reflects the company's ongoing strong cash flow generation, improved corporate structure following recent streamlining, recent moderate improvements in Russia's operating environment for private companies and the support afforded by TNK-BP's political endorsement, despite some ongoing uncertainties.

TNK-BP's ratings remain underpinned by the group's significant scale in terms of reserves and production, which position it as Russia's second-largest integrated oil and gas company, the agency said. The ratings are also supported by the company's low cost production and the high level of integration with its downstream business.

Conversely, ratings remain constrained by some field concentration, given that three fields account for 60% of reserves, and the need for license extension at its vast Samotlor field, which expires in 2013. The agency said TNK-BP's ratings incorporate the expectation of a gradual increase in debt to finance new investments in both new and mature fields in the coming years, though not beyond its leverage target of 25% to 35%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.