S&P affirms Suez

Standard & Poor's said it affirmed its A- long-term and A-2 short-term corporate credit ratings on Suez SA, following Suez's €11.2 billion cash and share offer for the 49.9% of Electrabel that it does not own.

The outlook is stable.

S&P said the affirmation reflects that this acquisition, if successful, will increase Suez's share of earnings from low risk activities. It will also streamline Suez's structure and considerably improve cash flow circulation within the group.

The financial impact of this transaction will be largely offset by the full consolidation, in S&P's analysis of Suez, of all of Electrabel's earnings and cash flows and by the €2.5 billion rights issue, which Suez is expected to complete in the near term.

The agency said the ratings on Suez continue to reflect its substantial diversity and recurring utility cash flows, as well as the strong European market positions of its European energy, water and waste activities.

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