Recipient email addresses will not be used in mailing lists or redistributed.
Use semicolon to separate each address, limit to 20 addresses.
characters you see
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
Don't want to see this again?
Accept our to continue to Moodys.com:
AND SCROLL DOWN!
By clicking “I AGREE” [at the end of this document],
you indicate that you understand and intend these terms and conditions to be
the legal equivalent of a signed, written contract and equally binding, and
that you accept such terms and conditions as a condition of viewing any and all
Moody’s information that becomes accessible to you [after clicking “I AGREE”] (the
“Information”). References herein to “Moody’s” include Moody’s
Corporation, Inc. and each of its subsidiaries and affiliates.
Terms of One-Time Website Use
you have entered into an express written contract with Moody’s to the contrary,
you agree that you have no right to use the Information in a commercial or
public setting and no right to copy it, save it, print it, sell it, or publish
or distribute any portion of it in any form.
acknowledge and agree that Moody’s credit ratings: (i) are current opinions of
the future relative creditworthiness of securities and address no other risk; and
(ii) are not statements of current
or historical fact or recommendations to purchase, hold or sell particular
securities. Moody’s credit ratings and
publications are not intended for retail investors, and it would be reckless
and inappropriate for retail investors to use Moody’s credit ratings and
publications when making an investment decision. No
warranty, express or implied, as the accuracy, timeliness, completeness,
merchantability or fitness for any particular purpose of any Moody’s credit
rating is given or made by Moody’s in any form whatsoever.
3. To the extent permitted by law, Moody’s and its directors,
officers, employees, representatives, licensors and suppliers disclaim
liability for: (i) any indirect, special, consequential, or incidental losses
or damages whatsoever arising from or in connection with use of the
Information; and (ii) any direct or compensatory damages caused to any person
or entity, including but not limited to by any negligence (but excluding fraud
or any other type of liability that by law cannot be excluded) on the part of
Moody’s or any of its directors, officers, employees, agents, representatives,
licensors or suppliers, arising from or in connection with use of the
4. You agree to read [and
be bound by] the more detailed disclosures regarding Moody’s ratings and the
limitations of Moody’s liability included in the Information.
5. You agree that any disputes relating to this agreement or your use of
the Information, whether sounding in contract, tort, statute or otherwise,
shall be governed by the laws of the State of New York and shall be subject to
the exclusive jurisdiction of the courts of the State of New York located in
the City and County of New York, Borough of Manhattan.
28 Apr 2008
Moody's assigns A2 to REN -- Redes Energeticas Nacionais; stable outlook
London, 28 April 2008 -- [First-time ratings]Moody's Investors Service has today assigned a long-term issuer
rating of A2 to REN -- Redes Energéticas Nacionais,
SGPS, S.A. ("REN" or "the group"),
the sole owner and operator of Portugal's mainland high-voltage
electricity transmission and high-pressure gas transportation networks.
The outlook is stable.
Given its 51% (direct and indirect) ownership by the government
of Portugal, REN falls within the scope of Moody's rating
methodology for government-related issuers (GRIs). Hence,
its A2 rating reflects the combination of the following components:
(1) A Baseline Credit Assessment (BCA) of 8 which, on a scale of
1-21, maps to a "Baa1" and is underpinned by the low risk
of the domestic electricity transmission and gas transportation operations,
which generate virtually all of the group's earnings and cash flows,
conferred by the transparent and supportive Portuguese regulatory frameworks
for these sectors. The rating is also underpinned by expected sound
underlying growth of the country's electricity and gas consumption.
This helps mitigate REN's relatively weak financial profile expected
for the near-to-medium term as a result of the group's
significant EUR1.8 billion investment programme aimed at extending
and upgrading the existing networks.
(2) The Aa2/stable local currency rating of the Government of Portugal.
(3) Moody's assessment of medium dependence, which reflects
Moody's expectation that the majority of REN's revenues will
continue to be derived from domestic sources.
(4) Moody's assessment of medium support, which is underpinned
by (i) the group's ownership and operation of strategically important
key infrastructure and (ii) its status as a public company, thereby
allowing for the monitoring of the group's financial situation by
the Portuguese state. Nonetheless, Moody's believes that
the state would expect REN -- in the first instance -- to utilise
all other means available to the group in order to avoid a default before
it would consider bailing it out.
As a result of these parameters, REN's BCA receives a two-notch
uplift under Moody's GRI rating methodology.
The stable outlook reflects Moody's expectation that (a) under the
supportive regulatory environment, REN's debt protection metrics
will gradually improve to levels commensurate with the high end of the
Baa category despite the group's significant investment programme,
and (b) the currently existing material structural subordination will
be resolved in the near term.
The BCA assigned to REN could be moved to 7 (equivalent to a "A3")
from 8 ("Baa1") if (1) the new regulatory framework for electricity
(2009-2011) provides a similarly stable and predictable earnings
and cash flow base as the current framework, and (2) the group establishes
a track record in the combined operation of both the electricity transmission
and the gas transportation businesses (the latter had been acquired at
the end of 2006) as a result of which REN would be reasonably able to
achieve RCF/Net Debt of at least 10% and FFO interest cover of
around 4x on a sustainable basis. However, this would have
no impact on REN's final rating. Furthermore, at current
assumptions for support and dependence, a one-notch upgrade
of Portugal's local currency rating to Aa1 would leave REN's
rating unchanged; a one-notch downgrade to Aa3, although
currently not expected, would result in REN's rating to be
downgraded to A3.
Virtually all of REN's earnings and cash flows are generated by
domestic electricity transmission and high-pressure natural gas
transportation including related infrastructure for the reception,
regasification and storage of liquefied natural gas (LNG), the majority
of which is operated under exclusive long-term concessions.
The combination of the two business lines is, to some extent,
complementary given that a growing share of Portugal's generation
capacity is represented by gas-fired power plants (CCGT) which
have to be connected to both the gas network and the electricity grid.
Stability and predictability of group cash flows is conferred by the transparent
regulatory frameworks for electricity and gas, currently allowing
REN to fully pass through operating costs and earn a return on its regulatory
asset base. While the current three-year regime for electricity
is due to expire at the end of 2008, Moody's does not expect
materially adverse changes of the regulation. Furthermore,
the agency notes that historic tariff deficits, which were mainly
related to the group's previous role as agent for Portuguese special
regime generators coupled with historic caps on low voltage tariffs,
have now been largely recouped. Deficits of this magnitude are
unlikely to recur given that the company no longer has this role.
In order to meet forecast energy consumption growth, REN plans to
invest a total of around EUR1.8 billion in the extension and upgrade
of the existing energy transmission infrastructure over the period until
2012: EUR1.5 billion for the electricity grid and EUR346
million for the gas business. Investments will be predominantly
directed towards (1) reinforcing and expanding the existing electricity
grid; (2) connecting new generation capacity to the network;
(3) expanding the gas network to connect new gas-fired power plants;
(4) enhancing interconnections with Spain for both gas and electricity;
and (5) extending storage capacities for LNG and natural gas. This
capex programme implies negative free cash flows over the medium term,
which is expected to weigh on the group's financial profile measures
for an extended time. However, this is somewhat mitigated
by the fact that all investments will be made in the low-risk core
businesses and -- through the increase of the group's regulatory
asset base (RAB) following the completion of the assets -- will be
reflected in incremental earnings and cash flows. Moody's
expects the group to maintain its strategic focus on the core domestic
regulated transmission activities.
Moody's notes that the majority of REN's gross debt of EUR2.1
billion at the end of 2007 was represented by commercial paper located
at the level of its operating subsidiaries, predominantly at Rede
Electrica, thus exposing the group to a considerable refinancing
risk. Also, such levels of structurally senior debt could
justify notching of the senior unsecured obligations at the holding company.
However, Moody's understands that the group has recently received
an amount of EUR466 million, which the agency expects to be applied
to debt reduction, has extended part of its committed CP programs
until mid-2010, and intends to refinance the majority of
short-term debt with long-dated instruments at the holding
level, thus eliminating structural subordination and materially
improving REN's liquidity profile.
Headquartered in Lisbon, Portugal, REN is the sole concessionaire
of Portugal's electricity transmission and high-pressure
gas transportation networks with EUR555 million revenues generated in
the year ended December 2007. The group is 51% (directly
and indirectly) owned by the Government of Portugal.
Corporate Finance Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Corporate Finance Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
No Related Data.
© 2020 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH CURRENT OPINIONS. MOODY'S INVESTORS SERVICE DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY'S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY'S INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSESSMENTS"), AND OTHER OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY'S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY'S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
MOODY'S CREDIT RATINGS,
ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.
MOODY'S CREDIT RATINGS,
ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.
All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.
To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY'S.
To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.
Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody's investors Service also maintain policies and procedures to address the independence of Moody's Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody's Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com
under the heading "Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy."
Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. MOODY'S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.
Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization ("NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.