Moody's rates Moesk Ba2

Moody's Investors Service said it assigned a Ba2 corporate family rating to OJSC Moesk, and Moody's Interfax Rating Agency assigned a Aa2.ru national scale rating to the company.

The outlook is positive.

The agency said Moesk's ratings reflect the company's position as the monopoly distribution grid business in the Moscow region, Moesk's strategic and social importance for the highly populated and rapidly growing capital region combined with the plans for significant upgrade investments into its asset base, a supportive tariff regulation, a good cushion in financial metrics and the opportunities to substantially increase revenues provided by the fast-growing economy of the Moscow region.

At the same time, Moesk's ratings are constrained by uncertainties associated with the restructuring process of the Russian power sector, its exposure to a developing regulatory environment in the sector, a large investment program that is driven by the company's outdated and insufficient distribution assets, potential pressure on liquidity given the company's limited flexibility in implementing investments, lack of a track record as a standalone entity and additional risks related to Russia's general operating environment, Moody's said.

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