S&P: NEK on negative watch

Standard & Poor's said it kept the BB- long-term corporate credit rating on Natsionalna Elektricheska Kompania EAD (NEK) on CreditWatch, where it was placed with negative implications in December 2012.

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

The ongoing CreditWatch placement reflects the risk associated with the refinancing of NEK's €195 million syndicated loan, which matures in May after NEK extended it for a year, S&P said.

The agency also said it understands that Bulgarian Energy Holding has received a number of committed offers for its two alternative proposals to raise €250 million either in the form of bonds or a bank loan.

Although S&P said it believes that the parent company has taken steps to reduce the high degree of refinancing risk, some execution risks remain.

There also are continuing uncertainties about NEK's financial structure as a result of the ongoing transfer of its monopoly electricity system operator ESO EAD to Bulgarian Energy Holding, the agency added.

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