S&P gives Magyar Olaj- es Gazipari Rt. notes BB

Standard & Poor's said it assigned its BB long-term rating to the proposed €690 million perpetual deferrable convertible subordinated hybrid notes to be issued by Magnolia Finance Ltd., related to Magyar Olaj- es Gazipari Rt. (MOL).

At the same time, S&P said it assigned its BBB- long-term corporate credit rating to Magnolia, the same as that on MOL, based on the swap agreement between the two parties instead of a financial guarantee and on Magnolia's essential nature as holder of part of MOL's treasury stock.

Furthermore, the agency added it affirmed its BBB- long-term corporate credit rating and all debt ratings outstanding on MOL.

The outlooks on both MOL and Magnolia are stable.

S&P said the rating on MOL reflects its strong position in the Central and Eastern European oil refining market, together with a strong financial profile, noting that these strengths are offset by a fairly aggressive growth strategy and a less conservative financial policy owing to additional share buyback plans announced in December.

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