“This credit rating opinion conveys the sound business profile of Transelectrica as transmission & system operator with revenues supported by the regulated asset base (RAB), and by the prudent responsible approach in performing operational activities,” according to Transelectrica’s press statement sent to the Bucharest Stock Exchange.
Fitch Ratings on Thursday (Dec 19, 2019) has affirmed Transelectrica SA’s Long-Term Issuer Default Rating (IDR) at ‘BBB’ with a Stable Outlook and simultaneously withdrawn the rating.
The affirmation reflects Transelectrica’s resilient business profile as an electricity transmission system operator in Romania, with earnings supported by regulated asset base (RAB) regulation, and the company’s conservative balance sheet. The IDR reflects Transelectrica’s Standalone Credit Profile (SCP) of ‘bbb’ and is one notch above the sovereign rating of Romania (BBB-/Stable), due to Transelectrica’s weak links with its 58.7% shareholder, the Romanian state, assessed under Fitch’s Government-Related Entities (GRE) and Parent and Subsidiary Linkage (PSL) Rating Criteria, Fitch Ratings said in a statement.
The rating was withdrawn for commercial reasons. Fitch will no longer provide ratings or analytical coverage of Transelectrica.
Transelectrica is a regulated electricity transmission operator in Romania. The company benefits from RAB-based regulation, comparable with other European frameworks, but exposure to significant ex post adjustments creates cash flow volatility, Fitch statement also reads.
Such qualification is a notch above the sovereign one (BBB-/stable).
For the time being, Transelectrica is assessed and monitored by the rating agency Moody’s Investors Service.