S&P cuts Eesti Energia outlook to negative

Standard & Poor's said it revised the outlook on Eesti Energia AS to negative from stable to reflect the risk that the company's credit quality will weaken as a result of its possible participation in a prospective new nuclear power plant at Ignalina, Lithuania.

At the same time, the A- long-term corporate credit rating on the company was affirmed, S&P noted, adding that the rating reflects Eesti Energia's strong business risk profile, which is supported by its transmission and distribution monopolies and its dominant position in electricity generation and supply in Estonia.

S&P added that it also reflects Eesti Energia's strengthened position as a regional electricity exporter following the planned closure of aged reactors at the existing Ignalina nuclear plant and the January 2007 opening of the Estlink subsea cable to Finland.

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