National Grid's Rtgs Affmd by S&P;Off Watch; Otlk Stbl.LONDON--(BUSINESS WIRE)--Jan. 7, 1998--Standard & Poor's CreditWire 1/7/98 -- Standard & Poor's today affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its double-'A'-plus senior unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. , corporate credit and 'A-1'-plus commercial paper ratings of National Grid national grid Noun Brit & NZ 1. a network of high-voltage power lines linking major electric power stations 2. the arrangement of vertical and horizontal lines on an ordnance survey map Co. PLC ('National Grid') and removes them from CreditWatch where they were placed Nov. 25, 1997. The outlook on the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. rating is stable. National Grid's ratings reflect its fundamentally strong business position from its monopoly transmission business and the expectation that National Grid will still be cash generative gen·er·a·tive adj. 1. Having the ability to originate, produce, or procreate. 2. Of or relating to the production of offspring. generative pertaining to reproduction. after interest payments and capital expenditures. This is offset to an extent by National Grid's lower debt-servicing capabilities and lower financial flexibility short-term, following the increase of debt to finance the UK770 million (about US$1.3 billion) special dividend announced at interim results. Its core business remains an exceptionally stable anchor for its credit quality. Most of National Grid's revenues and profit come from its transmission business, an essential element of the national economic infrastructure. National Grid's cash flow is somewhat reduced from its regulated transmission business since March 31, 1997, following the conclusion of the price control review in fall 1996. However, National Grid Group PLC's ('NGG' - parent of rated entity) recent partial flotation flotation or froth flotation Most widely used process for extracting many minerals from their ores. The method separates and concentrates ores by altering their surfaces so that they are either repelled or attracted by water. of its stake in telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. through Energis Communications is viewed as a positive to overall business profile. As a result of this flotation, NGG NGG Next-Gen Gaming (GameFAQs message board) NGG Northern Green Gathering (Yorkshire, England) NGG Nokia Group Graphic NGG Next Generation Gateway NGG Gas Generator Speed NGG Nasty Girly Gang has effectively obviated the need for any further, direct capital investments in Energis. Despite having failed in its recent bid to acquire Powernet of Victoria, Australia, Standard & Poor's expects NGG to continue to investigate further overseas investment opportunities. Currently its overseas investments are relatively modest. Standard & Poor's expects the financial profile of the group to remain robust notwithstanding the recently announced UK770 million special dividend which will be partially financed by an exchangeable bond exchangeable bond A special type of convertible security that permits the holder to exchange the bond for shares of a company in which the issuer has an ownership position. of around UK300/UK500million which is expected to be rated at the senior issuer rating level, i.e. double-'A'-plus/Stable. Standard & Poor's expects cash flow interest coverage to remain above 5 times (x) and the Board is committed to maintaining financial targets which should achieve this level going forward unless key strategic investment opportunities are identified. Even then the financial strategy is to maintain strong coverage levels consistent with the current rating level. OUTLOOK: Stable. With the next regulatory review some four years away, the rating should benefit from a period of certainty. Furthermore the rating gains stability from the government's golden share and there is also a limit on the maximum ownership in National Grid Group of 15%, Standard & Poor's said. -- CreditWire Copyright 1998, Standard & Poor's Rating Services CONTACT: Marc Watton, London (44) 171-826-3641 Mark Lewis, London (44) 171-826-3615 For more information on criteria or subscriptions: http://www.ratings.standardpoor.com |
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