Standard&Poor’s Ratings Services has assigned its single-‘B’-plus senior unsecured debt rating to the proposed US$500mn loan participation notes to be issued by Salomon Brothers Inc for the sole purpose of financing a loan with matching terms and conditions to Russia’s OAO Tyumen Oil. The debt rating mirrors Standard&Poor’s corporate credit rating on the loan guarantor, TNK International Ltd (TNK; B+/Positive/–), the holding company of Tyumen Oil and Russia’s fourth-largest vertically integrated oil major. The bonds tenor will be five years and the amount is US$500mn.


“The bond proceeds will be used to refinance part of TNK’s existing short-term financial debt obligations, extend the company’s average debt maturity profile, and for general corporate purposes,” says Eric Tanguy, credit analyst at Standard & Poor’s Corporate Ratings Europe.


The ratings on TNK are supported by the massive and growing flow of hard-currency cash earnings generated by the company through exports of crude and oil products, sound operating performance, sustained production growth, strong management, and the company’s adherence to its objective of maintaining net debt at about US$2.5bn. The company faces the risks of operating in the Russian Federation (BB-/Stable/B), however, with continuing export bottlenecks, a volatile fiscal and regulatory framework, domestic prices well below international ones, and difficulties in genuinely diversifying into natural-gas operations.


Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor’s web-based credit analysis system, at All ratings affected by this rating action can be found on Standard & Poor’s public website at under Fixed Income in the left navigation bar, select Credit Ratings Actions. s