S&P rates Coentreprise de Transport d'Electricite, bond

S&P said it assigned an A- long-term corporate credit rating to Coentreprise de Transport d'Electricite (CTE), a holding company of French power grid Reseau de Transport d'Electricite (RTE).

The outlook is stable.

At the same time, the agency assigned a BBB+ rating to the proposed issuance expected in 2017.

S&P said the action reflects its view that debt at CTE, which owns 100% of RTE, will be serviced by RTE's cash flow generation, and the agency therefore takes a consolidated view of RTE and CTE.

“We believe that CTE could benefit from extraordinary state support as it is owned by public entities and owns the French TSO. However, in our view, the level of support it could receive is lower than that of RTE, leading us to rate CTE at A-, one notch lower than RTE,” S&P said in a news release.

“In addition, we believe that the debt issued by CTE is structurally subordinated to that of RTE and therefore we rate the proposed bond at BBB+, one notch lower than the rating on CTE.”

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