Moody's upgrades Transelectrica to investment grade, stable outlook

Moody's Investors Service has, on October 19, assigned Baa3 long term issuer ratings to the Romania-based monopoly electricity transmission operator Transelectrica (TEL), bringing it to the lowest level of the investment-grade region.

Concurrently, it withdrew the other ratings, as per the rating agency's practice for corporates transitioning to investment grade. The outlook was changed to stable from positive.

The action follows Moody's affirmation of the Baa3 rating of the Government of Romania (Baa3 stable) and the change in outlook to stable from negative.

The upgrade of the rating to Baa3 reflects the improved credit quality of the Government of Romania (Baa3 stable) and Moody's assessment of the likelihood of the government providing support to Transelectrica.

In the current five-year regulatory period, which runs from 2020 through 2024, TEL continues to benefit from a fair and rather transparent regime under a revenue cap model, which entitles the company to a 6.39% return on the Regulatory Asset Base (RAB) and reasonable and timely recovery of costs incurred.

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