No immediate ratings changes on power reforms: S&P
Electricity reforms either "favourable" or "manageable", says S&P
Dec. 11 (BusinessWire) - Proposed electricity reforms are expected either to have "favourable" or "manageable" consequences for the four largest generator-retailers, for which Standard & Poor's assigns credit ratings.
The reform package announced by Energy Minister Gerry Brownlee on Wednesday "has no immediate effect on the credit quality of the four generator-retailers", S&P said in a statement today.
"In our view, the proposed changes are likely to have
either favourable or manageable implications. If
implemented (they) are not only significant for the sector's
operating and competitive landscape, but also financially in
the case of Genesis and Meridian," said lead S&P credit
analyst Pravathy Iyer.
"Indeed, we believe the
changes will likely result in all the rated entities
re-evaluating their business and financial strategies.
Although the companies have varying levels of headroom at
each of the respective ratings, primarily due to differences
in their growth appetite and financial risk profile, the
credit quality of the rated entities will be largely driven
by how they respond and adapt to the new operating
landscape."
S&P would evaluate responses and factor
them into the ratings for Contact Energy, Genesis Energy,
Meridian Energy or MightyRiverPower, which remain unchanged
for now.
(BusinessWire) 16:08:21