International rating agency Moody’s has improved the corporate family rating of Russian shipping company Sovcomflot to Ba1 from Ba2, and the company’s probability of default rating to Ba1-PD from Ba2-PD, with a negative outlook, the agency said in a statement.
“At the same time, Moody’s upgraded to Ba2 from Ba3 SCF’s (Sovcomflot’s) senior unsecured issuer rating and the senior unsecured rating of the U.S. $800 million Eurobond issued by SCF Capital Limited and guaranteed by SCF on the back of improvements to the company’s standalone credit quality (baseline credit assessment upgraded to ba3 from b1),” Moody’s said.
“The upgrade takes into consideration that the company is proactively addressing its liquidity management, notably the refinancing of $800 million bond maturity in 2017. The outlook on all ratings is negative (in line with support provider),” the agency added.
“SCF’s position as a 100% state-owned company means that Moody’s rates the company under its government related issuer (GRI) methodology. According to this methodology, SCF’s Ba1 corporate family rating is driven by a combination of its baseline credit assessment (BCA) of ba3, a measure of standalone credit strength; the Ba1 government bond rating of Russia, with a negative outlook; the low default dependence between SCF and the Russian government; and the strong probability of provision of state support to the company in the event of financial distress,” Moody’s said.
“As part of the action, Moody’s has upgraded SCF’s BCA to ba3 from b1, reflecting material improvement in the company’s financial performance and the expectation that liquidity will be managed prudently,” the agency added.