Moody's downgrades Gas Natural on LatAm exposure

Bnamericas Published: Tuesday, May 20, 2003
Credit rating agency Moody's downgraded Monday the long-term debt of Spanish gas company Gas Natural, partly on fears about its exposure in Latin America, Moody's said in a statement. Moddy's cut the ratings of Gas Natural and its guaranteed subsidiary, Gas Natural Finance, to A2 from A1. The downgrade affects 525mn euro senior unsecured notes issued by Gas Natural Finance due 2010. The rating outlook is stable, and Moody's confirmed Gas Natural's short-term Prime-1 rating. As well as Latin America, Moody's pointed to Gas Natural's move into thermoelectric power generation in Spain as reasons for the downgrade. Around one third of cash flow will come from a combination of domestic power generation and Latin American activities. Moody's considers that these activities increase the overall business risk profile of the group and reduce the stability and predictability of previous cash flow generation. Furthermore, Gas Natural will probably seek to re-align its capital structure through increased dividend payouts and additional investments after the withdrawal of its bid for Spanish energy company Iberdrola, Moody's said. For the Moody's report in full, see

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