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Moody's downgrades and places on review for possible further downgrade ABS notes issued by Petroleum Export Ltd (Egypt)

Approximately USD 622 Million of rated debt securities affected.
London, 24 August 2009 -- Moody's Investors Service has downgraded and placed on review for possible further downgrade the following series of notes issued by Petroleum Export Limited ('Issuer'):

Class A1 Notes Due 2010, Downgraded to Baa3 and Placed Under Review for Possible Downgrade; previously on 16 November 2008 Downgraded to Baa1;

Class A2 Notes Due 2010, Downgraded to Baa3 and Placed Under Review for Possible Downgrade; previously on 20 June 2008 Downgraded to Baa1; and

Class A3 Notes Due 2011, Downgraded to Baa3 and Placed Under Review for Possible Downgrade; previously on 21 July 2005 Definitive Rating Assigned Baa1.

The notes are backed by future deliveries of crude and naphtha by The Egyptian General Petroleum Corporation (EGPC) . EGPC is an economic authority of the Arab Republic of Egypt responsible for the development and exploitation of Egypt's petroleum resources. Although legally independent, EGPC is fully owned and closely controlled by the Government of Egypt. The company is subject to direct oversight by the Egyptian Ministry of Petroleum . Moody's therefore views EGPC as a de facto government agency.

The future flow nature of the transaction implies that the ratings of the notes are directly exposed to the credit quality of EGPC . In particular, the transaction is exposed to, amongst other things, EGPC 's ability to deliver sufficient crude and naphtha under the forward sale agreement and the ongoing risk that the Egyptian government may intervene in the crude deliveries due to the Issuer. Although EGPC is not rated on a standalone basis, for the reasons noted above its rating is likely to be very close to that of the Egyptian Government. Moody's rates the Government of Egypt at Ba1 with a stable outlook in both local and foreign currency.

Today's rating action brings the Issuer's ratings closer into line with those of the Government of Egypt, a treatment that is consistent with other issuers that are closely linked to national governments. Moody's review of the ratings will re-examine any grounds for positioning the rating of the Notes above the sovereign Ba1 level despite the Issuer's exposure to EGPC and EGPC 's close ties to the Government of Egypt.

Moody's ratings address only the credit risks associated with the transaction. Other non-credit risks have not been addressed, but may have a significant effect on yield to investors.

The last rating action on notes was on 16 November 2008 for Class A1, when Moody's took a rating action on bonds insured by MBIA Insurance Corporation. The last rating action for Class A2 notes was on 20 June 2008 when Moody's took rating action on bonds insured by XL Capital Assurance Inc. The Baa1 rating for Class A3 was originally assigned on 21 July 2005.

The principal methodology used for rating these transactions is "Moody's approach to rating obligations backed by Future Export Receivables (October 2005)", which can be found at www.moodys.com

Research&Ratings/Rating Methodologies/Structured Finance directory, in the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered can also be found in the Credit Policy & Methodologies directory.

Moody's is monitoring these transactions on an ongoing basis. To obtain more information, please visit Moody's website at www.moodys.com or contact our Client Service Desk in London (+44-20-7772 5454).

-Ends-

Frankfurt
Marie-Jeanne Kerschkamp
Managing Director
Structured Finance Group
Moody's Deutschland GmbH
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

London
Durga Bhavani
Analyst
Structured Finance Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

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© Press Release 2009