Moody’s raises Transelectrica to Ba1

Moody's Investors Service said it upgraded Transelectrica SA’s corporate family rating to Ba1 from Ba2 and probability of default rating to Ba1-PD from Ba2-PD.

The agency also upgraded its view of Transelectrica's standalone credit quality, as expressed by the company's baseline credit assessment (BCA), to ba2 from b1.

The outlook is stable.

Moody’s said the upgrade reflects the improved revenue stability and cost recovery mechanisms embedded within the current third regulatory period and the consequent improved visibility of Transelectrica's revenue and costs over the current regulatory period. The regulatory building blocks and the regulatory input assumptions have evolved and are expected to allow the company to manage its capital expenditure program within a risk profile commensurate with a Ba1 rating.

The upgrade also reflects the improving financial profile given the changes to the company's financial covenant package and improved liquidity position. Given the low leverage of Transelectrica, Moody's expects that the company will maintain robust credit metrics until at least the end of the present regulatory cycle ending June 30, 2019.

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