11 June 2004 07:46
S&P ASSIGNS `RUA+` NATIONAL SCALE RTG TO FEDERAL GRID CO.
MOSCOW. June 11 (Interfax) - Standard & Poor's Ratings Services has assigned its "ruA+" Russia
national scale rating to Russia-based electricity transmission grid operator Federal Grid Co. of the Unified Energy
System, S&P said in a press release Friday.
The ratings on FGC are constrained by the rating of its 100% parent, the electricity utility RAO UES of Russia, which
has a lower stand-alone credit quality from which FGC is not fully ring-fenced. The ratings on FGC further reflect the
company's and the Russian regulator's short operating track records; the company's significant--partly
debt- financed--investment needs; and the general risk of the Russian environment such as its unpredictable legal system
and burdensome bureaucracy.
These weaknesses are offset by FGC's position as the monopoly transmission operator in Russia, which helps
generate stable cash flows. The ratings are also supported by the company's currently very low financial debt
leverage, although debt is expected to increase over the medium term.
"A possible future improvement in FGC's credit quality is likely to reflect any improvement of its parent
company RAO UES," said Standard & Poor's credit analyst Magnus Pettersson. "We expect that RAO UES
will benefit from increased transparency and reduced political intrusion in the Russian regulatory environment, on the
back of the continued political and economic development of the Russian Federation".
[Interfax] |
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