OIL gets ‘Baa2 (Stable)’ rating from Moody’s
2 Oct 2013 10:18 PM IST
Oil India Ltd (OIL) has been rated ‘Baa2 (Stable)’ in its maiden international credit rating evaluation by Moody’s Investor Service. A ‘Baa2’ rating reflects the baseline credit assessment of baa2, which is one notch higher than the rating given by Moody’s to the Union Government (Baa3 stable).
The fact that a public sector enterprise (PSE) like OIL wherein the Union Government holds 68.43 per cent of the equity has been rated at one level up vis-à-vis its sovereign itself speaks volumes about the strong financial and operational management of the company, under the able and dynamic leadership of CMD S K Srivastava.
Moody’s has used its standard methodologies for rating OIL, which include evaluation of key credit-metrics made-up of financial and operational performance, existing regulatory framework (including the subsidy and pricing mechanism) and company’s future plans. In some of the key credit-metrics, OIL ranked even stronger than other investment-grade international E&P companies.
OIL has historically maintained a conservative financial profile. However, the company plans to fund its expansion activities with a mix of operating cash flows and debt. The Moody’s rating will help Oil India Ltd get access to the international markets for raising of debt through bonds.
Incorporated in 1959, OIL is the country’s second largest national oil and gas company as measured by total proved plus probable oil and natural gas reserves and production.
The fact that a public sector enterprise (PSE) like OIL wherein the Union Government holds 68.43 per cent of the equity has been rated at one level up vis-à-vis its sovereign itself speaks volumes about the strong financial and operational management of the company, under the able and dynamic leadership of CMD S K Srivastava.
Moody’s has used its standard methodologies for rating OIL, which include evaluation of key credit-metrics made-up of financial and operational performance, existing regulatory framework (including the subsidy and pricing mechanism) and company’s future plans. In some of the key credit-metrics, OIL ranked even stronger than other investment-grade international E&P companies.
OIL has historically maintained a conservative financial profile. However, the company plans to fund its expansion activities with a mix of operating cash flows and debt. The Moody’s rating will help Oil India Ltd get access to the international markets for raising of debt through bonds.
Incorporated in 1959, OIL is the country’s second largest national oil and gas company as measured by total proved plus probable oil and natural gas reserves and production.
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