Moody's rates Latvenergo Baa1

Moody's Investors Service said it has assigned a Baa1 senior unsecured issuer rating to the Latvian electric utility, Latvenergo.

The outlook is stable.

The rating factors the following: (1) The strategic importance and strength of Latvenergo's position as the dominant vertically integrated electric utility in Latvia; (2) Some implicit support from its 100% ownership by the Latvian state (Latvia, rated A2). (3) Moody's expects Latvia to benefit from economic and financial integration with upcoming membership in the EU in May 2004. (4) The Latvian market is set to be fully liberalized by 2007, and although liberalization has, so far, had a limited impact on the market due to lack of meaningful competition, Moody's notes that a more liberalized market may have a greater impact in the future.

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