Moody’s upgrades EEM

Moody's Investors Service said it upgraded the long-term issuer rating of Empresa de Electricidade da Madeira, SA (EEM) to B2 from B3 and converted the issuer rating into a corporate family rating in line with the agency's practice for corporations with junk-grade ratings.

Moody's also said it withdrew the company’s B3 issuer rating. The outlook is stable.

The upgrade reflects the progress the company has made in resolving certain legacy issues, thereby enabling it to reduce debt against the background of a slowly growing Portuguese economy, the agency explained.

The upgrade also considers the settled regulatory framework in which it operates, Moody’s said, and an expectation that the company will implement measures to address tighter efficiency factors in the current regulatory period.

The rating also is supported by the company’s relatively low business risk profile but constrained by its high leverage and relatively weak liquidity profile, the agency said.

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