S&P ups Hidroelectrica outlook to positive

Standard & Poor's said it revised it outlook on Romania-based SC Hidroelectrica SA to positive from stable and affirmed the company's long-term corporate credit rating.

The outlook revision is due to the expected positive impact from a faster and more favorable market deregulation development than previously expected, the agency said. More than 80% of electricity produced in Romania is now sold at market prices, and this is expected to have a substantial positive impact on Hidroelectrica. In the past, the company had been restricted to selling a large portion of its production at low regulated prices.

S&P said the rating on Hidroelectrica reflects the company's exposure to the remaining transition economy features of the Republic of Romania (foreign currency BBB-/Stable/A-3) in which it operates. The rating also reflects significant, partly debt-funded, medium-term capital expenditure plans.

These factors are mitigated by Hidroelectrica's access to competitive low-cost hydro-generation assets, a strong competitive position in the region, the positive implications of an expected gradual market opening and implicit support from its 100% owner, the Romanian government, the agency said.

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