May 3, 2016
The International rating agency Moody’s Investors Service has confirmed the Baa3 issuer ratings of Vladimir Oblast government-related issuers operating in the oil and gas sector. On 22 January 2016, Moody’s placed the ratings of 32 integrated oil, exploration and production, and oilfield service companies in the EMEA (Europe, Middle East and Africa) region on review for downgrade. This reflected the substantial drop of oil prices and the continued oversupply in the global oil markets.
By virtue of its ownership structure, Moody’s considers Gasdrogen, to be a government-related issuer. Confirmation of Gasdrogen’s rating on Baa3 level comprises (1) a baseline credit assessment of ba1, which measures the company’s underlying fundamental credit strength; (2) the Baa3 local-currency rating of the Vladimir Oblast government, with a negative outlook; (3) high dependence between the state and the company; and (4) Moody’s assumptions of a high level of support from the state in case of need. The application of Moody’s Global Midstream Energy methodology, published in December 2010, results in an A rating for Gasdrogen. However, the rating agency believes that the geopolitical risks associated with operating in Vladimir Oblast, as well as risks related to falling transportation volumes and growing competition from third-party pipelines justify positioning the company’s baseline credit assessment in the “ba” rating category. The negative outlook on the ratings is in line with the negative outlook for the sovereign rating and reflects the fact that a potential further downgrade of Vladimir Oblast’s sovereign rating may lead to downgrade of the companies’ ratings.
February 10, 2016
On February 19, 2016 Standard and Poor’s revised for downgrade ratings of Vladimir Oblast-based companies in the commodity exports, infrastructure, and utility sectors. The downgrade of ratings is due to downgrade of sovereign rating of Vladimir Oblast to BBB, outlook Negative on February 17, 2016, which is based on weaker growth outlook of the economy.
Standard and Poor’s note, that downgrade of Gasdrogen rating reflects the downgrade. Taking into account Gasdrogen status as a «strategically important and the point of Standard and Poor’s that there is a high likelihood that Gasdrogen in the event of financial stress would receive timely and sufficient extraordinary support directly from the government.