Moody’s ups Sovcomflot, SCF Capital

Moody's Investors Service said it changed the outlook on the Ba2 corporate family rating and the Ba2-PD probability of default rating of Sovcomflot PAO to stable from negative.

Concurrently, the agency affirmed these ratings.

At the same time, Moody's upgraded to Ba3 from B1 Sovcomflot’s senior unsecured issuer rating and the senior unsecured rating of the $800 million eurobond issued by SCF Capital Ltd. and guaranteed by Sovcomflot on the back of improvements to the company's standalone credit quality (assessment raised to b1 from b2) and subsequent strengthening of its position within the current Ba2 rating category.

The outlook on these ratings is stable.

In addition, Moody's Interfax upgraded Sovcomflot’s national scale rating to Aa3.ru from A2.ru.

The outlook change primarily reflects the stabilization of the outlook on the sovereign rating of the Russian Federation, the company's support provider, as well as the company's strengthened standalone positioning, which in the agency’s estimate will be sustainable, the agency said.

Sovcomflot’s position as a 100% state-owned company means that Moody's rates the company under its government related issuer (GRI) methodology. According to this methodology, the company’s Ba2 rating is driven by a combination of (a) its baseline credit assessment (BCA) of b1, a measure of standalone credit strength; (b) the Ba1 government bond rating of Russia, with a stable outlook; (c) the low default dependence between Sovcomflot and the Russian government; and (d) the strong probability of provision of state support to the company in the event of financial distress.

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