Moody’s lowers Eesti Energia

Moody’s Investors Service said it downgraded the rating and the senior unsecured ratings of Eesti Energia AS to Baa3 from Baa2.

Moody’s also said it downgraded the company’s short-term rating to P-3 from P-2.

The outlook is stable.

The downgrades conclude a review that began in February, Moody’s said.

The downgrades consider Eesti Energia’s exposure to a prolonged weak power and oil price environment, the agency said.

The company’s credit metrics also are expected to deteriorate from recent historic levels over the next two- to three-years to levels consistent with a Baa3 rating, Moody’s said.

The ratings reflect an expectation that lower power and shale oil prices will negatively impact the group’s profitability and cash flows, the agency said.

The ratings also consider the group’s strong position in its domestic market as an incumbent vertically integrated utility, moderate leverage and cash-flow predictability in connection with the electricity distribution activities, Moody’s said.

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