S&P reconfirms Transgaz ratings, with stable outlook

Standard & Poor’s (S&P) yesterday affirmed the ratings of Transgaz company (TGN) at BB+ for long-term loans in foreign currency and BBB- for long-term loans in Romanian currency, with a stable outlook, as it expects the company to maintain a robust financial situation, Mediafax reports. “We base our anticipations on our assumption that Transgaz’s dividend payout on profits in 2011 and beyond will revert to 50%, after the government’s imposed temporary hike to 90% for state-owned companies as part of the national fiscal consolidation strategy.

We understand that Transgaz has filed a waiver for the exceptional dividend distribution on 2010 profits, and that the outcome should be known over the coming weeks. If the waiver is granted, we anticipate an increase in Transgaz’s investments in 2011,” reads a press release issued by S&P yesterday. The base-case scenario for Transgaz does not factor the financial impact of a Transgaz participation in the Nabucco project, as the rating agency noticed the existence of permanent uncertainties regarding gas supply sources, the cost of the project and its final financing structure, including the nature and extent of the Romanian state’s contribution.

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