Aktuell Rapport nr 11/2017
Title: Affirmation of Energa SA's rating by Moody's
Report no.: Current Report No. 11/2017
Current Report No. 11/2017
Date of Preparation: 9 February 2017
Subject: Affirmation of Energa SA's rating by Moody's
Legal Basis: Article 17 Section 1 of the Market Abuse Regulation - confidential information
The Management Board of ENERGA SA ("Company", "ENERGA") hereby reports that, on 9 February 2017, the rating agency Moody's Investors Service ("Agency", "Moody's") affirmed the ‘Baa1' issuer rating of the Company and the Baa1 rating of the bonds issued by the Company's subsidiary ENERGA Finance AB (publ). The outlook for the rating is stable.
In the Agency's opinion, the rating reflects the significance of a high share of the regulated distribution segment in the Group's earnings. The transparency of the segment's cash flows favorably affects ENERGA's credit profile and curtails the risks arising from the execution of the Company's major capital expenditure program updated in 2016, resulting in an increase in ENERGA's debt ratios, as well as low electricity prices and a weaker support mechanism for renewable generation in Poland. At the same time, in its rating assessment, Moody's assumes that the ENERGA Group will not engage in any acquisitions the scale of which would significantly exceed the level of capital expenditures accepted in the Group's updated strategy. Moreover, the rating takes into account a higher business risk profile for the generation and sales segments. The Agency notes that a remaining source of uncertainty is the future shape of the energy market in Poland due to, among other factors, the planned introduction of the capacity market. The stable outlook for the rating reflects the Agency's expectation that ENERGA, despite the occurrence of unfavorable market factors, will maintain its debt ratios at a certain level.
The Agency's full report is available on the Moody's website.