Moody's changes outlook on REN to positive; affirms ratings

Moody's Investors Service said it changed the outlook on REN - Redes Energeticas Nacionais, SGPS SA and its finance subsidiary REN Finance BV to positive from stable.

Concurrently, Moody's affirmed REN’s Baa3 issuer and senior unsecured ratings. The agency also affirmed REN Finance BV’s Baa3 backed senior unsecured ratings.

The rating action follows REN’s announcement on May 14 of an updated strategy for the 2021-24 period, and reflects the expectation it is likely to maintain a solid financial profile over the period, Moody’s said. Under its new strategy, REN plans to invest €200 million-€235 million annually. Around 75% of this capex will be dedicated to electricity transmission in Portugal.

“The change in outlook to positive takes account of the existence of various measures to partly finance this capex program, including (1) direct agreements negotiated with renewable developers covering 3.5 gigawatts of solar capacity and under which developers will fund the associated network connections; and (2) a revised dividend policy over 2021-24, with a 10% reduction in the dividend floor,” Moody’s said in a press release.

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