Standard & Poor’s lowers Statnett’s credit rating
(5/3/2008)
Standard & Poor's Ratings Services has lowered its long-term corporate credit rating on Statnett SF to 'AA-' from 'AA'. At the same time, Standard & Poor's sustains the short-term corporate credit rating. The outlook is stable.
According to Standard & Poors the ratings continues to reflect Statnett’s excellent business profile as the monopoly electricity-transmission system operator in the prosperous and stable Kingdom of Norway (AAA/Stable/A-1+), in addition to State support. The ratings also benefit from a more favorable tariff structure that was implemented as of 2007.
The rating action reflects Standard & Poor’s expectations that Statnett’s financial ratios will remain weak over the medium term as a result of its expanded investment plans. Statnett is targeting NOK24 billion of capital investments through 2017 of which the large part will be allocated to the main power grid.
Other major projects include the NOK2.5 billion NorNed subsea cable connection to The Netherlands, which is expected to become operational in April 2008, and the construction of reserve power generation for NOK1.8 billion, which is due to be completed in 2008.
The ratings could be raised should Statnett’s financial risk profile demonstrate a significant improvement over the medium term.
