Moody’s Investors Service has yesterday downgraded to Caa1 from B2 the long-term corporate family rating (CFR) and probability of default rating (PDR) of Hidroelectrica S.A, according to a press release. This concludes the review initiated by Moody’s on 20 June 2012. The rating outlook is negative. There is no rated debt outstanding. Following this rating action all ratings will be withdrawn. “The Caa1 rating reflects significantly increased payment default risk and the inherent unpredictability of future developments under the insolvency proceedings,” said Richard Miratsky, a Moody’s Vice President – Senior Analyst and lead analyst for Hidroelectrica.However, the Caa1 rating also incorporates Moody’s view that the insolvency filing in this specific case does not constitute an immediate default by Hidroelectrica due to its primary focus on the company’s reorganisation under judicial administration. Moody’s expects that Hidroelectrica’s financial position upon entering the insolvency process will be such that it could continue to meet debt service and repayment from its own resources over the short term.