S&P affirms Mosenergo

Standard & Poor's said it affirmed its B- long-term issuer credit ratings on Mosenergo (AO). The outlook is positive.

S&P said the affirmation reflects Mosenergo's strong competitive position in the relatively lucrative, solvent and growing Moscow region, supported by its diversified combined heat- and power-generation portfolio, limited regional electricity import potential and the company's de facto heat generation monopoly.

The ratings on Mosenergo are, however, constrained by the risks of operating in a transition economy in Russia, continued uncertainty over the ability to pass through cost increases and fund investments within the low-tariff regulatory framework, Mosenergo's weakening business and financial profile following its restructuring as a generation company from a vertically integrated utility and the company's very weak liquidity position, according to S&P.

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