SSE plc
CREDIT RATING DOWNGRADE
SSE notes the decisions of both Moody's and Standard and Poor's to downgrade SSE's credit rating one notch following completion of both agencies' reviews which were announced in September 2018.
Moody's
SSE's rating moves from 'A3 review for downgrade' to 'Baa1 stable outlook' consistent with the following guideline credit metrics:
· a RCF/Net debt metrics of around 11% in 2018/19 and 2019/20, trending toward the low teens in percentage terms; and
· a FFO/Net debt ratio of around 20%.
Standard and Poor's
SSE's rating moves from 'A-negative watch' to 'BBB+ outlook stable' consistent with the following guideline credit metric:
· a FFO/Net debt ratio of about 18%.
As a long-term business, SSE believes it should maintain a strong balance sheet, illustrated by its commitment to a robust ratio for both Retained Cash Flow/Net debt and Funds From Operations/Net debt. With its high-quality portfolio of assets and increasing focus on regulated energy networks and renewable sources of energy, SSE believes its new credit rating metrics are sustainable and consistent with an ability to secure funding from debt investors at competitive and efficient rates.
Gregor Alexander, Finance Director, SSE plc, said:
"We have had constructive discussions with both Moody's and S&P and understand why they have taken these decisions. A Baa1/ BBB+ credit rating is one of the strongest held by private sector utilities across Europe and it should not have a significant impact on our ability to secure funding at competitive rates.
"As a company with an increasing focus on regulated energy networks and renewable energy we remain committed to a strong balance sheet, supported by financial discipline and a commitment to taking the right decisions for the long term."
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