Transpower rating on review for possible cut by Moody's

Monday 22nd December 2008

Transpower New Zealand, which manages the national grid, may have its Aa2 credit rating cut by Moody's Investors Service because of its plans to ramp up investment on power lines.

Transpower is spending about $2 billion on the grid, to increase capacity and replace aging lines. The state-owned company has been battling power companies and other government agencies over the spending plans.

"The review for possible downgrade reflects the continued weakening in Transpower's financial profile due to substantial capital expenditure programme over the medium to long term to upgrade its existing network capacity," said Spencer Ng, a Moody's analyst, in a statement.

Last week, the Electricity Commission blocked Transpower's proposal to spend a further $480 million to upgrade lines through the city of Auckland.

By Jonathan Underhill

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