Moody's may upgrade TPP Varna

Moody's Investors Service said it placed Bulgaria-based TPP Varna EAD's Ba2 foreign-currency corporate family rating on review for possible upgrade following the announcement by the Bulgarian Privatisation Agency that it has accepted an offer of €206 million from Czech utility CEZ AS to acquire 100% of TPP Varna.

Moody's predicted that the acquisition would have a positive impact on TPP Varna's rating considering the stronger credit profile of the CEZ group, which includes the finance company CEZ Finance BV. If the acquisition is completed, TPP Varna would lose its status as a government-related issuer and upwards pressure would develop on the rating as a result of the new ownership structure.

Any potential uplift provided by CEZ for TPP Varna's foreign-currency rating would, however, be constrained by the Baa3 foreign-currency ceiling of the Bulgarian government, the agency noted.

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