Moody's puts Yukos on downgrade review

Moody's Investors Service said it placed the Ba1 senior implied and Ba2 issuer ratings of Yukos Oil Co. under review for possible downgrade.

Moody's said the review has been triggered by the mounting pressure on the Russian oil company, the growing likelihood of Government-imposed fines and by the increasing gravity of potential outcomes for the group.

While noting that Yukos' underlying performance remains stable, Moody's said that the cumulative affect of the recent formal tax audit claiming that Yukos owes $3.3 billion in tax for 2000, questions raised over the validity of some of Yukos' licenses, the allegations made against further directors and shareholders of Group Menatep, Yukos' largest shareholder, and the still unresolved unwinding of the planned merger with Sibneft, has caused the rating agency to reassess its view of the risks facing Yukos and to place the company's ratings under review for possible downgrade.

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