Moody’s Withdraws Oil Company MOL’s Ratings

Moody’s Ratings withdrew its ‘Baa3’ long-term issuer rating on MOL on Tuesday. The international credit rating agency justified the decision announced in London that it had withdrawn the rating of the Hungarian oil and gas company based on its own business considerations.

Moody’s did not provide any further explanation for Tuesday’s announcement. However, a statement in the company’s general code of practice stresses that in cases where Moody’s justifies the withdrawal of a rating on the basis of its own business considerations, the action does not reflect any concern about the creditworthiness or governance of the debtor concerned.

Moody’s points out in Tuesday’s statement that prior to the withdrawal, MOL’s ‘Baa3’ rating had a positive outlook.

The credit rating agency stresses that MOL is a leading integrated oil and gas company in Central Europe, with revenues of roughly $24.6 billion and assets of roughly $21.2 billion as of year-end 2023.

Just a year ago last December, Moody’s upgraded MOL’s rating outlook to positive from stable, indicating the possibility of an upgrade. In its explanatory note at the time, the rating agency highlighted that MOL’s diversification and earnings-generating capacity had improved since 2018, while the group’s debt quality metrics were strong.

Moody’s also stressed that

MOL’s oil and gas production has stabilized at around 90-100 thousand barrels of oil equivalent for the period to 2027, given the exploration of new reserves, notably in Croatia, Azerbaijan, and Kazakhstan.

In justifying last year’s upgrade of its outlook, Moody’s pointed out that MOL has a significant market-leading position in the CEE region, its Nelson Complexity Index – a measure of the complexity and sophistication of refining operations – is above average, and allows MOL to produce high-margin refined products from heavy, Sulphur-type crude.

Via MTI, Featured image: Facebook/MOL