Transgaz’s long-term corporate credit rating was affirmed at ‘BB’.
“The stable outlook reflects our opinion that the regulatory framework in Romania has improved and will support Transgaz’s cash flow generation at least until the end of the current regulatory period in 2017,” the rating agency said. “There have been several recent changes to the regulatory framework that we consider credit supportive.”
However, the regulatory framework in the country still lacks predictability and visibility, S&P said.
Transgaz’s ratings could come under negative pressure if the company’s financial performance weakens, “for example due to higher dividend payouts, higher-than-anticipated investments, or weaker cash flow generation.”
A weakening of Transgaz’s business risk profile could also trigger a negative rating action, S&P added.
Conversely, S&P could take a positive rating action if the agency’s assessment on Transgaz’s financial risk profile is revised to modest, or if the sovereign ratings on Romania are upgraded.