Moody's rates Lukoil bond Baa2

Moody's Investors Service said it assigned a provisional Baa2 rating to the proposed bond to be issued by Lukoil International Finance BV, an indirectly owned subsidiary of OAO Lukoil.

The rating will be guaranteed by Lukoil. The agency affirmed Lukoil's issuer rating at Baa2.

The outlook is stable.

The proceeds will be used for general corporate purposes.

The ratings are supported by the company's strong financial metrics, underpinned by the lowest leverage among its Russian peers in the sector and substantial oil and gas reserves, which support 20 years of production at current rates, Moody's said.

The ratings also consider that a large share of total reserves is concentrated in Western Siberia, where production levels are on the decline, the agency said.

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