ONGC Videsh Ltd (OVL), the overseas arm of Oil and Natural Gas Corp (ONGC), will kickstart roadshows on Wednesday for its first ever overseas bonds issue as it aims to raise at least $900 million, investment bankers said. The funds raised from the dollar-denominated issue will be used to fund an acquisition in Azerbaijan.
In September 2012, Hess Corp said it had agreed to sell 2.72% stake in the large Azeri, Chirag and Guneshli (ACG) group of oilfields in Azerbaijan, and 2.36% stake in an associated pipeline, to ONGC for $1 billion. ONGC got the Cabinet approval for the deal in January 2013.
Standard & Poor?s (S&P) on Tuesday assigned ?BBB-? long-term corporate credit rating on ONGC with a negative outlook. The global ratings agency has also assigned ?BBB-? rating to the proposed senior unsecured notes that have been guaranteed by the parent company.
?We may lower the rating on ONGC if we lower the sovereign credit rating. We do not expect to lower the rating on ONGC on account of the company?s own operating or financial performance,? S&P said in a statement.
S&P?s credit analyst Andrew Wong said, ?The sovereign credit rating on India constrains the rating on ONGC because of the potential for extraordinary negative government intervention in case of severe sovereign fiscal or external stress.?