S&P assigns ONGC Videsh notes BBB-

Standard & Poor's said it assigned its BBB- long-term issue rating to a proposed issue of dollar-denominated and/or euro-denominated senior unsecured notes by ONGC Videsh Ltd.

Oil and Natural Gas Corp. Ltd. (BBB-/negative/--), which wholly owns ONGC Videsh, will unconditionally and irrevocably guarantee the notes.

Oil and Natural Gas expects to primarily use the proceeds to refinance existing bridge loans incurred to acquire a participating interest in a Mozambique entity.

S&P said the rating reflects the company's strong competitive position as one of Asia's largest oil exploration and production companies, with stable production and good profitability.

However, Oil and Natural Gas’ production is concentrated in India, particularly the Mumbai basin, and its expansion outside India is in higher-risk countries. The company also continues to face ongoing negative government intervention, particularly by sharing government oil subsidies, the agency said.

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