Standard & Poor’s lowers Alliance Oil ratings to "B-"

The international rating agency Standard & Poor’s decreased the long-term rating of Alliance Oil Company Ltd from “B” to “B-“ and the national long-term rating from “ruA-” to “ruBBB”.

It is also said in a statement that S&P has lowered the senior unsecured rating of the company from “B” to “B-”. The recovery rating (“4”) is the same.

The ratings of the company (issuer credit rating, national rating and senior unsecured rating) are still on the list CreditWatch (ratings under review); the outlook was revised to “negative” from “developing”. The ratings were placed into the list of CreditWatch with a “developing” outlook on November 6th, 2013.

The decline of the ratings reflects an expected significant increase of the debt burden (“debt/EBITDA”) and a more aggressive financial policy from “Alliance Oil”. According to the data from the management of the company, the debt in the amount of $1.2 billion, attracted by the parent structure of Alliance Group for the financing of outstanding shares purchase of “Alliance Oil” in December 2013, is going to be liabilities of the company “Alliance Oil”.