Moscow, 6 November 2001; Moody's Investors Service has assigned a B1 rating to Sibneft's planned $250 million issue of three-year Eurobonds. Sibneft is the first Russian company to secure a rating which pierces Russia's B2 sovereign ceiling. Moody's also assigned a Ba2 local currency rating to Sibneft.
Moody's said in a statement that the ratings reflected Sibneft's "substantial proved reserves, the low depletion levels on most of its major oil fields, the expectation of considerable production growth, the successful implementation of advanced seismic and operational technology to improve recovery rates, the company's sizeable exports of crude and refined products, the relative sophistication and scale of its refining capacity, its improved profitability and strengthened cash generation, and the meaningful efforts the company has made towards achieving international standards of corporate governance, accounting disclosure and reserve analysis."
Sibneft president Eugene Shvidler welcomed news of the rating. "This credit rating underscores the fundamental strengths of our business. Sibneft has built a robust balance sheet through a policy of employing conservative financial management and maintaining low levels of debt."
Sibneft has mandated ABN Amro and Schroder Salomon Smith Barney to act as joint arrangers and bookrunners for a planned Eurobond issue. Sibneft became the first Russian company to issue a Eurobond when launched a $150 million three-year bond in August 1997. In March 1998, Sibneft issued a $200 million six month zero-coupon promissory note which was arranged by Salomon Smith Barney. This note was successfully redeemed in September 1998.