OREANDA-NEWS. July 12, 2010. Standard & Poor’s Ratings Services downgraded the long-term corporate credit rating of Eesti Energia by one notch to BBB+. The outlook of the rating is stable, reported the press-centre of Eesti Energia.

According to the rating agency downgrade reflects the separation of transmission system operator Elering from Eesti Energia group in January 2010 and expected increase in debt level due to significant increase in the level of capital expenditure. The credit rating factors in the ongoing support to Eesti Energia by Government of Estonia. Reduced Government support and carrying out the investment programme without share capital increase may have an impact on the credit rating.  Standard & Poor’s is of the view that to maintain the BBB+ credit rating, Eesti Energia should not exceed a debt level of 3 times EBITDA.

Margus Kaasik, the CFO of Eesti Energia commented on the reduction in credit rating by saying that the downgrade does not have a material impact on the financial viability or debt capacity of Eesti Energia. He added that the new credit rating will still guarantee a sufficient financial flexibility for the company, while stable outlook proves the viability of Eesti Energia's capital expenditure programme, which has been assessed by S&P. 

Eesti Energia achieved its first credit rating in 2002, when Moody’s Investor Service and Standard & Poor’s assigned a long-term corporate credit rating of Baa1 and A- respectively. The latest change in Eesti Energia’s credit rating took place in 2006 when Moody’s raised the credit rating to A1 level. Standard & Poor’s Ratings Services changed the credit rating outlook of Eesti Energia to negative in August 2007.