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Moody's rating for Transpower's $1.5bn notes

Thursday 7th April 2011

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Moody's Investor Services has given a provisional (P)Aa3 rating, with a stable outlook, for state-owned electricity network owner Transpower's $1.5 billion medium term notes programme.

The rating was supported by Transpower's strong standalone credit profile reflecting its low business risk and relatively stable and predictable cash flows combined with the likely strong support from the Government, Moody's assistant vice-president Matthew Moore said.

"Transpower's standalone credit profile is supported by the company's monopoly position as the sole electricity transmission network owner and operator in the country and demand risk is also viewed as low, given the history of electricity volume through the company's network," Moore said.

Balancing those strengths was the large grid investment planned for the next several years which would be funded by a combination of debt and internally generated cash flow, and the evolving regulatory environment.

Moody's expected notes issued under the programme to be primarily used to refinance existing indebtedness and fund Transpower's capital expansion plans.

Any incremental indebtedness issued under the programme was not expected to weaken Transpower's credit metrics beyond acceptable levels for the rating.



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