Fitch revises ENN Energy to stable

Fitch Ratings said it affirmed ENN Energy Holdings Ltd.’s long-term issuer default rating and senior unsecured rating at BBB.

The outlook was revised to stable from positive.

The rating is underpinned by favorable government policies toward the city gas distribution sector in China, ENN's strong business profile and its sound credit metrics.

Fitch said the outlook revision reflects the uncertainty on the use of large cash balances, although ENN's core credit metrics (including financial leverage net of cash) are stronger than its BBB profile.

ENN has a large cash reserve, and a large cash return to shareholders or a transformative investment program – although unlikely in the city gas distribution market in China – could weaken its credit metrics and/or elevate its business risk profile, the agency said.

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