S&P rates Nostrum notes B+

Standard & Poor's said it assigned its B+ issue rating to the proposed $400 million senior notes to be issued by Nostrum Oil & Gas Finance BV, a wholly owned subsidiary of Kazakhstan-based Nostrum Oil & Gas LP (B+/stable/--; formerly Zhaikmunai LP).

At the same time, S&P assigned a recovery rating of 3 to the proposed notes, indicating an expectation of meaningful (50%-70%) recovery for creditors in the event of a payment default.

S&P also affirmed its B+ issue rating on the existing $560 million senior notes due in 2019 issued by Zhaikmunai LLP, a wholly owned subsidiary of Nostrum Oil & Gas LP (Nostrum). The recovery rating on the existing senior notes remains unchanged at 3, indicating an expectation of meaningful (50%-70%) recovery for creditors in the event of a payment default.

S&P said it understands that the proceeds of the proposed notes will be used to repay in full the $92.5 million outstanding of the 10½% senior notes due in 2015 issued by Zhaikmunai LLP.

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