Moody’s Investors Service on Tuesday downgraded state-owned Oil and Natural Gas Corporation’s (ONGC) rating in view of the uncertain oil price environment, depleting cash reserves of the government and government guidelines constraining its ability to lower dividends.
The rating agency downgraded ONGC’s local and foreign currency issuer ratings to Baa2 from Baa1. It also downgraded the ratings of the unsecured bonds issued by ONGC and those issued by its subsidiary ONGC Videsh Ltd.
The outlook on all ratings remains negative, it said. “Given the increasingly uncertain oil price environment, ONGC’s depleted cash reserves, and government guidelines that constrains state-owned enterprises’ ability to lower dividends, ONGC’s ratings are materially challenged at the previous rating level and its credit profile insufficient to remain above India’s Baa2 sovereign rating.
