Moody's takes action on Russian utilities

Moody's Investors Service said it downgraded AK Transneft’s issuer rating and TransCapitalInvest Ltd.’s $1.05 billion loan participation notes to Baa2 from Baa1. The outlook is negative.

Concurrently, Moody's changed the outlooks for RusHydro and Inter RAO UES to negative from stable, affirmed their Ba1 corporate family ratings and Ba1-PD probability of default ratings and affirmed RusHydro's RUB 20 billion of loan participation notes at Ba1.

Finally, Moody's affirmed FGC UES, JSC's Baa3 issuer rating and the Baa3 rating of the first series of RUB 17.5 billion notes issued by Federal Grid Finance Ltd., a special-purpose vehicle of FGC UES. The outlook is negative.

These actions follow the downgrade of Russia's government bond rating to Baa2 from Baa1 on Oct. 17.

The agency said Transneft's downgrade reflects its strong linkages with the Russian sovereign and its high sensitivity to changes in sovereign creditworthiness.

The changed outlooks for RusHydro and Inter RAO signal the companies' links with the Russian sovereign, which could exert downward pressure on the ratings in the case of a further sovereign downgrade, Moody’s said.

The affirmations of Inter RAO, RusHydro and FGC UES reflect Moody's view that the strong probability of state support assumption embedded within the companies' ratings remains in place given that the Russian government's credit strength remains sufficient.

© 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.