Standard & Poor's is threatening further credit rating downgrades at Yukos, the Russian oil group, after lending banks led by SG warned the company it faces defaulting on a $1bn (€842m) loan following a $3.5bn tax dispute with the Russian government.

The increasing risks of a liquidity crisis at the Russian oil company were raised on Monday when the banks notified Yukos of the potential default. It cited the tax claim against Yukos that was filed on April 14 and will be ruled on later this month. There is also a court order banning Yukos from selling or encumbering its assets until the $3.5bn dispute is resolved.