Moody's: Naftogaz outlook negative

Moody's Investors Service said it has changed the outlook on the B1 foreign currency corporate family rating of NJSC Naftogaz of Ukraine, as well as its $500 million senior unsecured loan participation notes, to negative from developing.

Naftogaz's probability of default rating is affirmed at B1, the agency said, adding that the rating action follows the recent change of the outlook on Ukraine's key sovereign ratings to stable from positive, as the global liquidity crunch has combined with existing macroeconomic, financial and political challenges, thus diminishing the probability of the upgrade of the sovereign rating in the next 12 to 18 months.

Moody's rated Naftogaz in accordance with its rating methodology for government related issuers, thus the current ratings reflect a combination of the following inputs: baseline credit assessment of 17 (on scale of 1-21, where 1 represents lowest credit risk, corresponding to a Caa1 rating); B1 local currency rating of the Ukrainian government; medium dependence and high support.

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