Russ Oil-Gas

04-03-2009 - Upstream OnLine - Ratings agency Moody's cut its ratings on Russia's gas export monopoly Gazprom today, saying the declining health of the Russian economy no longer justified rating Gazprom above the sovereign. The cut came a day after Gazprom, Russia's most indebted company with total borrowings of $60 billion, placed the country's first Eurobond since the global financial crisis, testing investor appetite for Russian risk. Moody's said it had downgraded Gazprom's senior unsecured issuer and debt ratings by one notch to Baa1 from A3, in line with Russia's sovereign rating or three notches above junk. It said the outlook on the ratings was stable. "Movements in oil and gas prices and changes in the health of the Russian economy are factors similarly impacting the fortunes of both parties," Moody's said in a statement. "Moody's therefore no longer believes it is appropriate to assign a rating to Gazprom higher than that of the Russian Federation's rating of Baa1". The agency said, however, that the rating action does not reflect any changes in its view of Gazprom's stand-alone credit risk profile, equivalent to a Ba1, "or our assessment of the high degree of support Moody's assumes the Russian state would provide if necessary to Gazprom given its strategic importance".