Moody's gives Baa2 rating to Oil and Natural Gas notes

Moody's Investors Service said it assigned a Baa2 foreign-currency issuer rating to Oil and Natural Gas Corp. and a provisional Baa2 foreign-currency debt rating to ONGC Videsh Ltd.'s proposed issuance of senior bonds. The agency noted that the ratings are constrained by India's Baa2 foreign-currency country ceiling.

Oil and Natural Gas' Baa1 local-currency issuer rating was affirmed, and the outlook is stable.

The proceeds will be used to refinance bridge loans for the acquisition of participating interests in upstream and midstream oil and gas assets in Azerbaijan.

The agency said the Baa1 local-currency issuer rating reflects the company's strong credit metrics, even after its two recent acquisitions in the Caspian Sea oil and gas fields that totaled $6 billion.

"While the acquisitions are substantial and will result in higher leverage, the company's elevated leverage position would still remain within our tolerance level for the company's current rating. Moreover, we expect [the company's] credit metrics to remain strong over the next three years," said Vikas Halan, a Moody's vice president and senior analyst, said in an agency news release.

Moody's expects the company's ratio of adjusted debt to EBITDA to stay below 1.5 times between 2013 and 2015.

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