Karlsruhe. Rating agency Standard & Poor’s (S&P) has confirmed EnBW Energie Baden-Württemberg AG’s “A-“ rating and raised the outlook to “stable”.
Its position as Germany’s third largest producer of electricity and leading integrated energy company in Baden-Württemberg is rated as good, as is the share in the regulated business, in particular the grid area, and the expected improvement in key rating indicators as a result of implementing an extensive package of measures. However, S&P has also determined that some of these measures will only take effect in the medium term.
“We are pleased that Standard & Poor’s has acknowledged the measures management has taken as a way of strengthening the company’s capital structure such as issuing the hybrid bond, expanding the FOKUS efficiency programme and adjusting our divestiture plans. It’s a wonderful success,” says EnBW’s Chief Executive Officer Hans-Peter Villis.
On the one hand, the rating reflects S&P’s expectation that EnBW’s credit risk profile will worsen as a result of Germany’s rapid phase-out of nuclear power and lower margins from electricity generation. On the other, the rating agency sees the change in EnBW’s ownership at the beginning of 2011 as increasing the likelihood of the company receiving support from the state of Baden-Württemberg. In this connection, S&P expects the shareholders to help to improve the capital structure. This had the overall result of S&P confirming the rating and raising the outlook to “stable”.
S&P highlights EnBW’s strong liquidity position and expects the company to actively manage potential business combinations and divestitures, capital expenditures and distributions to the shareholders as a way of maintaining the key rating indicators as required for the rating. EnBW’s CFO Thomas Kusterer: “The agency has commended us for our active debt management as part of our consistent financial strategy. The fact that receiving a good credit rating takes top priority for EnBW’s management as part of the further implementation of its corporate strategy has been rewarded by Standard & Poor’s.”