Moody's assigns Electric Networks of Armenia Ba2

Moody's Investors Service said it assigned a Ba2 corporate family rating and a Ba2-PD probability of default rating to the Electric Networks of Armenia, or ENA, the national electricity distribution grid of the government of Armenia. The outlook is stable.

ENA's Ba2 rating is supported by the company's monopolistic position in the electricity distribution in Armenia, transparent, albeit relatively new, system of tariff regulation and clear-cut long-term arrangements for recovery of costs and pre-agreed investments, as well as the regulator's structural independence from the government. It also benefits from good visibility of profitability and cash flow generation until 2027, owing to the signed 2016-2027 agreement between the company and the regulator and its strong financial profile.

ENA will need to finance the second stage of the company's investment plan starting in 2021. Moody's said it understands necessary funding will be procured from an international bank syndicate in 2020.

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