The move follows a cancellation of the company's merger with Gazprom, and proceeds from its limited liquidity, and excessively aggressive strategies and finance policies, explains the agency.
"Rosneft financial situation is upset with huge debts-in particular, short-term and secured-into which it went to purchase Yuganskneftegas, previously the biggest Yukos production branch, at $9.3 billion. Next, the company has very modest liquidity, while pursuing extremely aggressive financial strategies. Its current ratings reflect the attitude of government-controlled financial institutions to the company. These attitudes are positive, to an extent, but the merger has been quashed, so we don't think Rosneft will have considerable support from those institutions-hence our ratings," says Tatiana Kordyukova, Standard & Poor's credit analyst.
Rosneft stays on the CreditWatch list as the S&P is wary of hazards the company is running, its liquidity presenting the worst danger, what with huge short-term obligations uncovered by available confirmed liquid resources.
"We shall strike Rosneft off the CreditWatch if its liquidity improves. On the other hand, if bankers insist on loan payments ahead of term, and the company fails to draw funds sufficient to pay its short-term debt, we may downgrade it again," warns the analyst.
The Moody's, another transnational rating agency, on the contrary, confirmed Rosneft $150 million Eurobonds at Baa3, and raised its emitter's rating to the same from a previous Ba3 investment level, both with positive forecasts.
The agency explains its optimism concerning Rosneft by its tentative merger with Gazprom abolished.