Moody’s innalza a BAA2 il rating di Edison Spa

Obblighi informativi verso il pubblico previsti dalla delibera Consob n. 11971 del 14.5.1999 e successive modifiche

Milano, 20 maggio 2005 - Edison rende noto che l’agenzia di rating Moody’s Investors Services ha elevato a Baa2 da Baa3 il rating di Edison Spa e della sua controllata Selm Holding International Sa. Entrambi i rating hanno outlook stabile.

Si riporta di seguito il testo integrale del comunicato stampa diramato da Moody’s in data 19 maggio 2005.


Rating Action: Edison S.p.A.
MOODY'S UPGRADES EDISON S.p.A. AND GUARANTEED SUBSIDIARY TO Baa2 WITH A STABLE OUTLOOK

London, 19 May 2005 - Moody's Investors Service has today upgraded Edison S.p.A.'s senior unsecured ratings to Baa2 from Baa3. Moody's has also upgraded the rating of Edison's guaranteed subsidiary, Selm Holding International S.A., to Baa2 from Baa3. All ratings have a stable outlook. Today's rating action concludes a review of the group's ratings initiated on 23 February 2005.
The rating action is primarily based on (1) a noticeable strengthening of Edison's financial profile, with 2004 results marginally exceeding Moody's expectations; (2) Moody's assumption that Edison will continue to strengthen its key debt protections metrics as it becomes more exposed to Italian wholesale power prices; (3) Edison's recent successes in bringing on-stream new power generation capacity; and (4) the recent favourable resolution of Edison's ownership structure, which will see Electricite de France (EDF, rated Aa3, stable outlook) and AEM S.p.A. become joint shareholders in Edison. At the same time, Edison's ratings remain constrained by execution risk related to the group's ongoing investment programme in electricity and gas, as well as event risk associated with shareholder actions which could see the company accelerate dividend payments in support of new debt raised to acquire Edison.
Having spent the past two years restructuring the business by disposing of approximately EUR 10 billion in revenues from non-core operations, Edison is today a focused domestic electric and gas utility business.
Moody's notes that management's successful completion of the company's restructuring, the substantial reductions in debt from EUR 15 billion in 2001 to just over EUR 5.0 billion (including EUR 1.1 billion from Edipower) and the gradual strengthening of its cash-generating ability and debt protection ratios have improved Edison's credit quality, which is now commensurate with a Baa2 rating.
At year-end 2004, Edison's retained cash flow (RCF)-to-net adjusted debt ratio was 11.8% and funds from operations covered interest expense 4.1 times. While today's rating action is supported by Edison's improving ratios, it also assumes that management will continue to strengthen the group's financial profile, as the cash flow contribution from stable CIP-6 contracts declines and is replaced by higher-risk merchant revenues, as well as greater take-or-pay exposure in Edison's growing gas business. The Baa2 rating incorporates Moody's expectation that Edison's RCF-to-debt ratio will further improve to and beyond the midteens over the medium-term rating horizon, and towards 20% over the longer term to support the group's gradually higher business risk profile. Similarly, FFO should cover interest 4 -- 5 times over the medium term and migrate closer towards 5 -- 6 times over the longer term.
Moody's added that Edison's ratings incorporated the expectation that the group's new shareholders may use the newly established holding company set up to acquire Edison to raise some acquisition debt. Moody's emphasised that any new debt situated at an immediate holding company of Edison, which is not guaranteed by its shareholders, would likely be serviced from Edison's cash flows and therefore added to Edison's current debt. Moody's continued that this and any resulting step-change in dividends added some concern to Edison's ability to strengthen its financial profile in line with Moody's expectations over the short to medium term. Accordingly, Moody's ratings assume that Edison's shareholders will align any unsupported debt raised at the new holding company with Edison's ongoing requirements to strengthen its financial profile in accordance with aforementioned parameters.
Moody's emphasised Edison's improved liquidity, which benefits from minimal debt maturities over the next 12 months and a committed and unutilised revolving credit facility of EUR 1.5 billion as liquidity back-up.
Edison faces some refinancing risk in 2007, when approximately EUR 1.4 billion in bonds mature, but may benefit from the conversion of warrants of around EUR 1.0 billion, which Moody's assumes. While Moody's expects Edison's capital expenditure to peak in 2005, ratings assume that the group's investments can be encompassed from internal cash generation and Edison will remain free cash flow positive going forward. No significant acquisitions are factored into the rating, although Edison may undertake smaller E&P (exploration & production) transactions to strengthen its equity gas.
Moody's also mentions Edison's ongoing success in bringing on-stream new generation capacity, which in 2005 alone will rise from 6.5GW at year-end 2004 to 8.5GW (excluding Edipower). Edison will bring onstream 800MW from its new Altomonte CCGT plant later this year; the 400MW Candela plant is on schedale to commence operations in July 2005, while the 800MW Torviscosa plant is due to come on-stream in January 2006. In total, Edison intends to have total capacity of 10.0GW by 2008 (14.0GW including Edison's 50% share from Edipower). Moody's ratings assume gradual moderate declines in Italian wholesale power prices from their currently exceptionally high levels as Italy's generation and interconnector capacity improves. Nonetheless, Moody's believes that Italian power prices are likely to continue trading at a premium to EU averages over the foreseeable future.
Furthermore, Moody's believes that the involvement of AEM S.p.A. -- one of Italy's largest regional utilities --as an equal shareholder will prove beneficial for Edison's commercial strategy, given its strong reliance on regional alliances to tap new commercial opportunities. Going forward, ratings could benefit, if Edison's business risk profile evolves closer to an integrated utility.
Edison S.p.A. is headquartered in Milan, Italy, and in 2004 reported net revenues of EUR 5.7 billion and EBITDA of EUR 1.2 billion. In its electric power business, Edison is the number two domestic provider with a production share of around 17% in 2004 (including its 50% stake in Edipower) and total capacity of 6,500 MW (9,600MW including Edipower). In its gas and hydrocarbon business, Edison is the number three provider with sales of 11bcm and a domestic share of Italian gas sales of 14% in 2004”.


Per ulteriori informazioni

Andrea Prandi/Direttore Relazioni Esterne e Comunicazione – 02.62227331
Emi Colombo/Ufficio Stampa – 02.62227345