Moody's lifts Novorossiysk notes to Ba1

Moody's Investors Service said it upgraded the $300 million senior unsecured loan participation notes issued by Novorossiysk Port Capital SA to Ba1 (LGD4, 52%) from Ba2 (LGD4, 65%), affirmed the corporate family and probability-of-default ratings of OJSC Novorossiysk Commercial Seaport at Ba1 and assigned an Aa1.ru Russian national scale corporate family rating to the seaport.

The outlook is stable.

The rating actions follow changes to the Novorossiysk group's debt structure. The agency said almost all of the group's secured bank debt has been repaid, had the security that supported it retired or is in the process of having such security interests retired. As a consequence, the subordination of the loan participation notes to debt in the operating companies has been eliminated.

Novorossiysk's ratings reflect its role as the operator of most of the stevedoring capacity at one of Russia's most important seaports under a long-term lease arrangement, its nationwide service area and substantial growth prospects, Moody's said.

The ratings also reflect the material capital expenditure obligations required to meet anticipated growth, the risk that significant year-on-year growth assumptions are not achieved and a capital structure incorporating somewhat shorter debt maturities than usual for a major infrastructure borrower, the agency added.

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