S&P: NEK on negative watch

Standard & Poor's said it placed the BB- long-term corporate credit rating on Natsionalna Elektricheska Kompania EAD (NEK) on CreditWatch with negative implications.

NEK is a subsidiary of the 100% state-owned holding company Bulgarian Energy Holding.

The CreditWatch placement reflects the uncertainties about NEK's financial structure after the planned unbundling of its monopoly electricity system operator ESO EAD and the transfer of ownership to NEK's parent Bulgarian Energy, S&P said.

The watch also will consider the refinancing risk associated with the refinancing of NEK's €195 million syndicated loan, which now matures in May 2013 after an extension earlier this year, the agency said.

NEK's business risk profile has weakened due to the Bulgarian government's decision to unbundle what was considered NEK's lowest-risk asset, S&P said.

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