Moody's lowers Parpublica, Energias de Portugal

Moody's Investors Services said it downgraded the ratings of Parpublica-Participacoes Publicas (SGPS) SA to A1 with a stable outlook from Aa2 on review for downgrade and affirmed the A3/P-2 ratings of Energias de Portugal, SA with a stable outlook.

The actions follow Moody's downgrade of the Government of the Republic of Portugal's ratings to A1 from Aa2. Also affected were Rede Ferroviaria Nacional Refer, EPE, which was downgraded to A1 from Aa2; Radio e Televisao de Portugal SA, which was downgraded to A2 from Aa3; and Redes Energeticas Nacionais, SGPS, SA, which was downgraded to A3 from A2.

All of the above companies are government-related issuers that have an element of potential government support incorporated within their ratings in accordance with Moody's rating methodology.

The agency said the downgrades reflect its view that the Portuguese government's financial strength will continue to weaken over the medium term, as evidenced by ongoing deterioration in the country's debt metrics, and the Portuguese economy's growth prospects are likely to remain relatively weak unless recent structural reforms bear fruit over the medium to longer term.

Moody's noted that Parpublica does not enjoy any explicit guarantees from the Portuguese government and that the rating is the same as the sovereign rating of Portugal.

Energias de Portugal's ratings reflect its position as the leading electricity company in Portugal and the agency's view that it will remain strategically important to Portugal.

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