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TEXT-S&P puts Russia's Mosenergo 'BB' rtgs on watch neg re MIPC news
December 7, 2012 / 9:41 AM / 5 years ago

TEXT-S&P puts Russia's Mosenergo 'BB' rtgs on watch neg re MIPC news

(The following statement was released by the rating agency)

Dec 07 -

Overview

-- We understand that Russian electricity and heat generator Mosenergo (AO) is in negotiations with the City of Moscow, the 89.98% owner of heating utility Moscow Integrated Power Co. JSC (MIPC), to acquire a stake in MIPC.

-- The transaction, if it proceeds and Mosenergo fully or partially funds it by issuing new debt, might push up Mosenergo’s ratio of debt to EBITDA beyond our current expectations.

-- We are placing our ‘BB’ long-term rating on Mosenergo and our ‘ruAA’ Russia national scale ratings on the company and its senior unsecured debt on CreditWatch with negative implications.

-- We aim to resolve the CreditWatch when we have more clarity on whether the transaction will proceed and, if it does, its price and financing.

Rating Action

On Dec. 7, 2012, Standard & Poor’s Ratings Services placed its ‘BB’ long-term corporate credit rating, ‘ruAA’ Russia national scale rating, and ‘ruAA’ Russia national scale senior unsecured debt rating on Russian electricity and heat generator Mosenergo (AO) on CreditWatch with negative implications.

Rationale

The CreditWatch placement follows the announcement in Russian media that Mosenergo is in negotiations with the City of Moscow (BBB/Stable/--), the 89.98% owner of Russian heating utility Moscow Integrated Power Co. JSC (MIPC), to acquire a stake in MIPC.

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