Moody’s reviews Origin Energy

Moody's Investors Service said it placed Origin Energy Ltd.’s Baa3/P-3 long-term and short-term issuer rating and Baa3 senior unsecured rating on review for downgrade.

At the same time, Origin Energy Finance Ltd.’s Baa3 senior unsecured rating, provisional Baa3 senior unsecured medium-term note program rating and Ba2 preference stock ratings were also placed on review for downgrade.

Moody’s said the action reflects the downward revision to its expectation for Origin's earnings on the back of the reduction in Moody's central oil price scenario. The reduced oil price scenario in turn is driven by the continuing oversupply in global oil markets and demand growth that remains tepid.

Oil prices are a key driver of the company's financial performance given its large exposure to oil-linked LNG exports. The agency’s revised price expectation for Brent crude oil price is an average of $33 per barrel and $38 per barrel in 2016 and 2017 respectively, a $10 per barrel reduction from the previous scenario.

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