March 5 (SeeNews) - Moody's Investors Service said it has completed a periodic review of Bulgarian Energy Holding's (BEH) ratings, reassessing their appropriateness in the context of the relevant methodology, recent developments, and a comparison of the financial and operating profile to similarly rated peers.
The review did not involve a rating committee, so the publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future, Moody's Investors Service said in a statement on Wednesday.
Moody's Investors Service also said in its statement:
"Bulgarian Energy Holding EAD's (BEH) Ba1 corporate family rating reflects the group's improved financial flexibility, following gradual reform steps of the regulated electricity market; the competitiveness of BEH's electricity generation portfolio with a large share of hydro and nuclear power; and its ownership of strategic parts of the domestic energy infrastructure such as the gas and electricity transmission grids.
However, the rating is constrained by BEH's volatile earnings profile and low cash flow visibility which are largely caused by an unsettled regulatory regime; by the ongoing transition of the Bulgarian electricity market towards full liberalisation; and by weak liquidity management, mitigated by the company's currently strong liquidity position.
BEH's rating reflects incorporates its 100% ownership by the Government of Bulgaria (Baa2 positive). Accordingly, and based on Moody's view of high default dependence and high support in case of financial distress, BEH's rating incorporates three notches of uplift from its standalone credit quality or baseline credit assessment of b1.
This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period."