Moody’s affirms Shanghai Electric

Moody's Investors Service said it affirmed Shanghai Electric Power Co. Ltd.'s Baa2 issuer rating and the Baa2 senior unsecured debt rating on its guaranteed bond issued by Shanghai Electric Power Finance Ltd.

The outlook is negative.

The agency said the issuer rating combines the company's standalone credit profile and a three-notch uplift based on Moody's assessment of likely extraordinary support from its parent, State Power Investment Corp. Ltd. (A2 stable), when needed.

Moody’s said the standalone credit profile is underpinned by its solid market position in Shanghai, and the good quality of its power-generation portfolio.

However, the agency said it is constrained by the elevated execution risks associated with its overseas expansion, its pressured financial profile, driven by its debt-funded expansion, and its weakened profitability amid rising coal prices and the absence of a timely cost pass-through tariff adjustment.

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