Moody’s downgrades Gas Natural

Moody’s Investors Service said it downgraded Gas Natural Ban SA’s national scale rating to Baa3.ar from Baa2.ar and affirmed its Caa1 global scale corporate family rating.

Moody’s also said it revised its outlook to negative from stable.

Despite the recently announced approval of the financial aid that will be provided by the federal government to the local gas-distribution companies, the downgrade and outlook change for Gas Natural considers this as a transitory measure since it does not solve the weak fundamentals of the gas-distribution business or address the unpredictability of the current regulatory framework, the agency said.

The ratings also reflect the company’s still fair credit metrics mainly derived from its low leveraged operations, Moody’s said, as well as the positioning of the company relative to other regulated companies operating within the country.

The ratings remain constrained by the company’s exposure to the unpredictable regulatory framework prevailing in Argentina for gas-distribution utilities, which also underpins the negative outlook, the agency said.

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