TEXT-S&P summary: Federal Grid Co. of the Unified Energy System
(The following statement was released by the rating agency)
Oct 11 - =============================================================================== Summary analysis -- Federal Grid Co. of the Unified Energy System - 11-Oct-2012 =============================================================================== CREDIT RATING: BBB/Stable/-- Country: Russia Primary SIC: Electric Services Mult. CUSIP6: 313354 =============================================================================== Credit Rating History: Local currency Foreign currency 04-Mar-2008 BBB/-- BBB/-- 02-Feb-2007 BB+/-- BB+/-- ============================================================================== Rationale
The ratings on Russia-based Federal Grid Co. of the Unified Energy System (FGC), the 79.55% state-owned electrical transmission grid company and system operator, reflect Standard & Poor's Ratings Services' opinion that there is a "very high" likelihood that the Russian government will provide timely and sufficient extraordinary support to the company in the event of financial distress. We assess FGC's stand-alone credit profile (SACP) at 'bb+'.
Our view of a "very high" likelihood of extraordinary government support is based on our assessment of FGC's:
-- "Very important" role, given the company's strategic importance to the government as a monopoly provider of essential infrastructure services; and
-- "Very strong" link with the Russian Federation, given the state's intention not to decrease its stake in FGC to less than the 75% stipulated by law in the medium term. In addition, the Russian government controls the company's strategy and operations.