The rating represents an assessment of the company's credit worthiness and is provided by various independent international agencies.
Hera's official rating is assigned by the two leading specialised credit agencies: Moody's and Standard & Poor's.
|Standard & Poor's||Moody's|
Last update: 10 June 2020
Last update: 27 August 2020
Moody’s rating is based on the strong business profile of the company, with an extremely well-balanced portfolio of activities and highlights the high visibility of regulated activities, together with solid financial metrics.
The positive rating takes into consideration Hera's external growth strategy. This targets small local utilities and is executed through share swap agreements with no recourse to additional debt, therefore preserving the company's balance sheet strength. Moody's also notes that, historically, the company has been able to extract synergies from acquired entities. The rating agency expects Hera to continue to pursue such a growth strategy, maintaining the same credit-supportive features.
Furthermore, Hera's Baa1 rating factors in (1) the company's strong liquidity position, and (2) its sustainable debt structure, whose features include high duration, very limited refinancing needs for the next two to three years, and a level of leverage on assets and cash flows that is commensurate with Hera's business risk profile. The negative outlook on Hera's rating is in line with Moody's outlook on Italy's sovereign rating. This reflects Hera's exposure to the challenging economic situation in Italy and the additional pressures that it could exert on the company's financial and business risk profiles.
Standard & Poor’s stated that, despite Hera's increasing involvement in the riskier electricity generation and trading business and a very aggressive dividend policy, Hera deserves a positive rating thanks to its relatively strong business profile (underpinned by a well-balanced portfolio to which low-risk monopoly-regulated operations contribute about 60% of EBITDA) and its strong franchise in the wealthy and populated northern Italian Region of Emilia-Romagna.
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