Moody’s: Latvenergo notes Baa2

Moody’s Investors Service said it assigned a Baa2 rating to Latvenergo AS’s 1.9% senior unsecured fixed-rate notes due 2022.

Concurrently, Moody’s also affirmed the company’s Baa2 issuer rating.

The outlook is stable.

The company issued €75 million of green bonds under the second issuance program. The notes carry a fixed coupon rate of 1.90% with a maturity date of June 2022.

The proceeds will be used for general corporate purposes, including financing or refinancing projects eligible under the issuer’s green bond framework, Moody’s said.

Latvenergo’s Baa2 rating is underpinned by the group’s strong competitive position in its Latvian domestic market as a vertically integrated utility, the agency said.

The ratings also are supported by the company’s the high proportion of its cost competitive and environmentally clean hydro-generation base, Moody’s said, along with its contribution from regulated transmission and distribution activities.

The ratings are constrained by its small size, the group’s substantial short generation position versus its supply requirements and the evolving nature of the electricity markets where Latvenergo operates, the agency said.

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