Moody's Withdraws Mol's Rating for Business Reasons

Moody's Ratings has withdrawn its 'Baa3' long-term investment grade rating on the Hungarian oil and gas company Mol.

The international credit rating agency stressed in the reasons for the decision announced in London that it had withdrawn the rating of the Hungarian oil and gas group on the basis of its own business considerations.

Moody's did not provide any more detailed reasons for Tuesday's announcement. However, a statement in the company's general code of practice stresses that when 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 at the time of the withdrawal, Mol's 'Baa3' rating had a positive outlook.

The rating agency stresses that Mol is one of the leading integrated oil and gas companies in Central Europe, with revenues of approximately $24.6 billion and assets of approximately USD 21.2 billion at the end of 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 very 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 it allows Mol to produce high-margin refined products from heavy, Sulphur-type crude.