Moody's confirms Santos

Moody's Investors Service said it confirmed Santos Finance Ltd.'s P-2 short-term rating, concluding the review for possible downgrade that began in October.

The confirmation follows Santos' announcement that it has withdrawn its takeover bid for Queensland Gas Company Ltd. The withdrawal of the offer removes the event risk and financial uncertainty that surrounded Santos' credit profile.

The rating is based on the unconditional guarantee provided by Santos Ltd. and reflects Santos' position as Australia's dominant onshore gas producer, stable cash flow levels supported by long-term gas contracts, solid cash flow generation and liquidity profile, Moody's said.

These factors are tempered by the company's small reserve base and the need for large capital expenditure over the medium-to long-term to replace its declining reserve base in the Cooper Basin, the agency added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.