Moody's changes Hera to stable

Moody's Investors Service said it changed to stable from negative the outlook on the Baa1 ratings of Hera SpA. The ratings have been affirmed.

"Our decision to stabilize the outlook on Hera's ratings primarily reflects the improvement of the company's credit metrics to a level now commensurate with its Baa1 rating after positive results in FY 2014 and Q1 2015," Alessandro La Scalia, a Moody's vice president, said in an agency news release.

"The resulting increase in financial flexibility should allow Hera to better manage the risks arising from its exposure to a still weak, albeit slowly improving, economic environment and to moderate headwinds in its regulated networks division, coming from a likely reduction of regulatory capital returns from 2016."

The agency said Hera's Baa1 rating reflects the company's moderate operating risk profile and diversified business mix, which provides good earnings predictability and low cash flow volatility given the sizable contribution of regulated activities to the company's profits.

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