Moody's upgrades Cores

Moody's Investors Service said it upgraded to Baa2 from Baa3 the long-term issuer rating and to provisional Baa2 from provisional Baa3 on the senior unsecured ratings of Corporacion de Reservas Estratégicas de Productos Petrolíferos (Cores).

Cores is the organization responsible for managing Spain's strategic oil reserves and controlling the nation's compulsory reserves of petroleum products and natural gas, Moody's explained.

The upgrade follows the recent decision to upgrade Spain's government bond rating to Baa1 with a stable outlook from Baa2, the agency said.

Cores was upgraded due to its strong link to the sovereign as a government-related issuer, its critical role managing the country's strategic oil reserves and the implicit support the government extends to the company, Moody's said.

The company's rating is one notch lower than Spain's ratings, reflecting the lack of explicit guarantees from the Spanish government, but also the relative weakness of the entity's underlying credit profile compared to the credit strength of the sovereign, the agency said.

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