Moody’s also affirmed the Ba2-PD probability of default rating (PDR).
“Transelectrica’s stabilized outlook reflects progress made by the company to strengthen its liquidity position, notably bolstered by the RON200 million bond issued in December 2013 that helped to reduce a reliance on short-term bank debt,” says Nicholas Stevens, Moody’s lead analyst for Transelectrica.
Moody’s expects Transelectrica to access again the domestic bond market in the second half of 2014, as part of its efforts to create a structurally stable liquidity base.
According to the rating agency, in the past, the company relied on development bank funding for defined capital projects and relatively shorter term bank finance, which, in the absence of committed bank facilities, exposes the company to liquidity risk in the event of any market disruption.
“By accessing domestic investors through public bond issuance, Transelectrica has gone some way to diversifying its funding sources and is now sufficiently funded for the capital programme over the next 15 months,” the release reads.
According to the agency, in 2013, Transelectrica demonstrated a stabilization in its financial performance.
Given the negative outlook on the Romanian sovereign rating, Moody’s would not expect to upgrade Transelectrica’s rating in the near term.
Transelectrica is majority-owned by the Finance Ministry, which controls 58.69% of the shares. Other shareholders include investment fund Fondul Proprietatea (FP.RO), with a 13.5% stake, and regional investment fund SIF Oltenia (SIF5.RO), with 6.3% of the shares.
In 2013, Transelectrica approved an overall budget of up to RON900 million for potential bond issues in 2013-2017, both in lei and in foreign currency.
The company raised RON200 million via the first issue in December at an annual yield of 6.1%. The proceeds will be used to refinance the company’s older loans and replenish its investment funds.