Moody's cuts Yukos Oil

Moody's Investors Service said it downgraded the senior implied rating of Yukos Oil Co. to Ca from Caa2. The company's senior unsecured issuer rating was also downgraded to Ca from Caa3. The outlook is stable.

Moody's said its action follows reports that Yukos has missed an interest payment on its syndicated bank facility and the expectation of the reduced weighted average recovery potential for all of Yukos' financial creditors following the forced sale of its main production asset, Yuganskneftegaz.

The largest part of the company's financial debt relates to secured facilities once totaling $2.6 billion, which are secured by export proceeds and were originally guaranteed by some of Yukos' main production assets, including Yuganskneftegaz, according to Moody's.

Moody's said it believes that parts of these facilities have been paid off over recent months from secured export proceeds. However, with the loss of Yuganskneftegaz and the magnitude of remaining tax claims, the prospect for further immediate debt repayments has diminished considerably.

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