S&P cuts long-term PPC rating

Standard & Poor’s cut its rating on Public Power Corporation (PPC), citing its weak financial performance, and placed the company on «Creditwatch» due to high finance risks. The agency lowered its long-term corporate credit and debt ratings on PPC, which has a market value of some 2.7 billion euros, to BBB from BBB+. «The downgrade reflects PPC’s weak operating and financial performance during 2008, and resulting deteriorating financial credit metrics,» said Standard & Poor’s credit analyst Ana Nogales. The market share held by PPC, 51 percent-owned by the state, remains above 90 percent as the utility continues to own and operate the national power distribution and transmission networks. «The placement (on Creditwatch) reflects the significant refinancing risk that results from PPC’s need to refinance about 600 million euros in the very near term (mostly in March 2009); the very weak liquidity resources of the group; and its high and increasing underlying leverage,» it added.