Hidroelectrica given "BB-" rating

Standard & Poor’s rating agency assigned its “BB-” long-term corporate credit rating to electricity generation company Hidroelectrica on Wednesday. The outlook is stable. g reflects the company’s exposure to the remaining features of the transition economy in Romania, and also the requirement that it sell 40% of its generation at low regulated prices, its poor history of financial performance and limited financial flexibility. This is mitigated by access to competitive, low-cost hydro-generation assets, a strong competitive position in the region, the prospects of regulatory pricing constraints decreasing as the market gradually opens, and tariff increases and implicit support from the Romanian State. “We expect that gradually increased tariffs and further opening of the market will help counteract an expected financial weakening due to Hidroelectrica’s large planned investment programme and exposure to low-price supply contracts,” said Standard & Poor’s credit analyst Andreas Zsiga. ZF