Moody’s confirms Company’s corporate family rating

21 November 2018

On Nov. 20, 2018 Moody’s Investor Service has confirmed the corporate family rating (CFR) of IDGC of Urals at Ba1 (Stable outlook).

OAO IDGC of Urals' Ba1 corporate family rating reflects its robust financial profile, with three-year average funds from operations (FFO) interest coverage of around 9.0x and three-year average FFO/net debt of around 65%, together with Moody’s expectation that the company's debt metrics will remain within the guidance for the current rating.

IDGC of Urals' Ba1 rating implicitly benefits from government support because the company is part of the state-owned PAO Rosseti (Ba1 positive) group. Moody’s analysts expect the state to step in with extraordinary support to avoid a payment default by the company if necessary. Such support is driven by the company's strategic role for the economy of the region.

Factors that could lead to an upgrade:

  • A clear evidence that the regulatory regime for the sector is evolving in the positive direction, providing for robust and predictable long-term recovery of costs and investments;
  • Maintenance of the company's moderate leverage and solid liquidity;
  • An upgrade of Russia's sovereign bond rating.

Factors that could lead to a downgrade:

  • Negative developments in the regulatory regime for the sector, which strain the company’s ability to recover its costs and investments, resulting in its FFO interest coverage and FFO/net debt falling materially and persistently below 4.0x and the mid-20s in percentage terms, respectively;
  • A reduction in government support for the sector;
  • Liquidity constraints.

Please, visit official web-site www.moodys.com for additional disclosures.

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