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Friday, September 17, 2004

S&P raises rating for Termoelectrica S.A.

NEW YORK, Sept 14 - Standard & Poor's Ratings Services said today it has raised its senior unsecured rating on the $200 million and $120 million notes issued on a fiduciary basis by J.P. Morgan Bank Luxembourg S.A. for S.C. Termoelectrica S.A. to 'BB+' from 'BB'. This follows the upgrade of the foreign currency senior unsecured rating on the Republic of Romania to 'BB+' from 'BB' earlier today (see the related release entitled "Republic of Romania Long-Term FC Ratings Raised To 'BB+' on Structural Reforms; Outlook Stable," available on RatingsDirect, Standard & Poor's Web-based credit analysis system). J.P. Morgan issued the notes on a fiduciary basis to fund loans made by it to Termoelectrica and 18 thermal power plants.

"The rating on the notes is based on the unconditional and irrevocable guarantee by the Republic of Romania of the due payment of principal and interest on the loans to the fiduciary, with the fiduciary using the proceeds of principal and interest payments from either the borrowers or guarantor to pay the notes' coupons and redemption amounts," said Standard & Poor's credit analyst Konrad Reuss.

Termoelectrica is 100%-owned by the Republic of Romania (foreign currency, BB+/Stable/B) and is not slated for full privatization in the near term. Termoelectrica is Romania's main producer of electric power and thermal heating. The company is stepping up its investment spending to boost efficiency and raise its environmental profile to EU standards--a vital objective in the Romanian government's EU accession plans.

Posted by Mihai : 9/17/2004 10:05:00 am