“The affirmation of ”Baa3” long term rating (”Investment-grade”) reflects the low risk profile of the company as the only operator which ensures the electricity transmission service in Romania, supported by the consistent implementation of key principles within a regulatory regime that favors the credit, by performance and financial stability together with a low level of financial debt,” the report reads.
“Transelectrica falls under our Government-Related Issuers methodology, given its 58.7% ownership by the Government of Romania (Baa3 stable). Because of the company’s strategic importance to the country, the current rating incorporates one notch of uplift from the BCA of ba1, reflecting the strong likelihood of extraordinary support from the government in case of financial distress and the very high default dependence since almost all earnings are generated domestically. The company is further exposed to domestic regulatory oversight and local economic and political conditions. As a consequence, we would not expect Transelectrica’s rating to exceed that of the Government of Romania,” Moody’s said in a statement.
According to Moody’s, “Transelectrica’s rating is thus constrained by the credit quality of its majority-owner, the Romanian State, but also by continuing weaknesses in the company’s governance. Ownership and control, board oversight and effectiveness, and management are key elements of our assessment of how governance affects creditworthiness. The composition of the company’s two-tier board structure is strongly influenced by the Romanian government and exhibits a lack of continuity as members of the management and of the supervisory boards are only appointed for very short terms and frequently replaced.”
Moody’s also states that “as a result, we observe the lack of a clearly defined strategy and management independence, which is also reflected in the absence of a clearly stated financial policy. In the past, this has occasionally led to significant dividend extractions, driven by the major shareholder. Disproportionate payouts could lead to weakening liquidity, however we acknowledge that past distributions have not caused liquidity shortfalls for the company.”
Transelectrica is valuerd by investors at RON3 billion after its shares traded 27% higher over the last year, amid deals worth RON143 million, and 7.4% higher so far in 2025, amid deals worth RON3.5 million, as per stock market data.