Moody's Investors Service has today confirmed the ratings of Russian government-related utility companies, OAO AK Transneft, Atomenergoprom, JSC, FGC UES, JSC, following the confirmation of Russia's government bond rating.
In particular, Moody's has confirmed the following ratings:
- OAO AK Transneft's Baa1 issuer rating and the Baa1 senior unsecured rating of the outstanding $1.05 billion loan participation notes issued by TransCapitalInvest Limited, a special purpose vehicle (SPV) of Transneft.
- Atomenergoprom, JSC's Baa2 issuer rating.
- FGC UES, JSC's Baa3 issuer rating, the (P)Baa3 senior unsecured rating of the RUB100 billion loan participation note programme, and the Baa3 rating of the first series of RUB17.5 billion of notes issued thereunder by Federal Grid Finance Limited, an SPV of FGC UES.
The outlook on all the ratings is negative.
Today's rating actions follow Moody's confirmation of Russia's government bond rating at Baa1 with a negative outlook on 27 June 2014 and conclude the review process on the ratings of Transneft, Atomenergoprom and FGC UES initiated on 3 April 2014. For additional information on sovereign ratings, please refer to the webpage containing Moody's related announcement.
As Transneft, Atomenergoprom and FGC UES are controlled by the Russian government, their ratings fall under Moody's methodology for government-related issuers and benefit from an uplift to the companies' standalone credit quality, which is measured by a baseline credit assessment (BCA), driven by the probability of state support.
Today's confirmation of the ratings of Transneft, Atomenergoprom and FGC UES reflects the strong linkages of the ratings with the Russian sovereign rating and their high sensitivity to changes in sovereign creditworthiness.
The negative outlook on all the ratings mirrors that on the sovereign, reflecting that a downgrade of Russia's sovereign rating could result in a downgrade of the companies' ratings.