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Thursday, November 04, 2004

Transelectrica's rating raised to BB

Standard & Poor's said today it raised its long-term corporate credit rating on Romania-based electricity transmission system operator C.N. Transelectrica S.A. (Transelectrica) to 'BB' from 'BB-'. The outlook is stable. "The upgrade reflects the decreasing regulatory and market risks, as well as improved forecast financial performance," said Standard & Poor's credit analyst Andreas Zsiga.

Romania's improved macroeconomic stability, economic reforms, and its possible accession to the EU by 2007 reduces the risk for adverse politically influenced actions. Transelectrica continues to be exposed to the Romanian economy, which is weaker and less stable than most Western European economies. Transelectrica's payment collection problems are decreasing, but remain a negative factor for the rating.

Transelectrica's total debt was Romanian lei 4,382 billion (€107 million) at Aug. 31, 2004. Transelectrica's financial profile is expected to weaken in the medium term owing to investments of about €100 million-€150 million per year to upgrade old transmission assets. This is expected to be balanced, however, by the reduced risk of adverse politically influenced actions, and increased prospects for an improved regulatory environment. The company would likely be indirectly affected by any change to the Republic of Romania. If the ratings on the Republic of Romania change, however, the ratings on Transelectrica will be reviewed separately.

Posted by Mihai : 11/04/2004 02:32:00 pm