S&P upgrade of Greek utility PPC a needed boost

Monday, 03 December 2018 11:37
UPD:11:40
EUROKINISSI/ΚΩΣΤΑΣ ΚΑΤΩΜΕΡΗΣ
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S&P's upgrading of Greece's Public Power Corp. (PPC), the state-run and dominant electricity utility in the country, bodes well for the ATHEX-listed company's efforts to restructure in the next six months.

In an announcement, PPC said the development reflects a successful debt restructuring of 1.3 billion euros recently with a consortium of Greek banks, as well as improved collection of arrears and prospects for the Greek economy, in general.

In basing its decision to upgrade the long-term issuer credit rating for Public Power Corp. S.A. (PPC) to 'CCC+' from 'CCC' and its outlook as "positive", S&P noted:

"Greek utility Public Power Corp. (PPC) has successfully secured liquidity

sources to meet debt maturities in 2019 including the €1.3 billion

syndicated loans with Greek banks and the April 2019 maturities on its

€350 million unsecured notes.

Improved economic prospects in Greece slightly enhances the Greek

government's capacity to provide PPC extraordinary support.

However, we continue to have doubts over the long-term sustainability of

PPC's operations given the ongoing very weak market fundamentals, which

leaves the capital structure still fragile.

We are therefore raising our long-term issuer credit and issue ratings on

PPC to 'CCC+'.

The positive outlook reflects that on the Greek government and our

expectations that PPC would receive extraordinary support in case of

need, specifically in the form of facilitated access to financing markets."

 

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