Monday, March 3, 2008

Romania's Transgaz long-term CCR raised to 'BBB-'; outlook negative - S&P

MUMBAI, Mar. 3, 2008 (Thomson Financial delivered by Newstex) -- Standard & Poor's (NYSE:MHP) Ratings Services has raised its long-term corporate credit rating (CCR) on Romanian government owned natural gas transmission company SNTGN Transgaz SA Medias to 'BBB-' from 'BB+' on an improved financial profile enhanced by an initial public offering (IPO), expected to fund part of the company's medium-term investment program.

The outlook is negative, S&P said.

The upgrade also reflects the increased visibility and amount of operating cash flow following a significant tariff increase and the finalization of tariffs for the regulatory period through June 30, 2012, S&P added.

It said the strengths are offset by an outdated asset base, which requires continuous investment; remaining transition-economy features and worsening macroeconomic conditions in Romania; and planned investment in the Nabucco international pipeline project.

The ratings agency added that the negative outlook reflects the outlook on the Republic of Romania and the possibility of adverse macroeconomic developments there, and some resultant uncertainty about how the state may influence Transgaz's financial and dividend policies.

The Romanian government's ownership in Transgaz decreased to 75 pct following an IPO in 2008, S&P added.

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