Public disclosure required by Consob Resolution No. 11971 of May 14, 1999, as amended. The two top credit rating agencies recognize the Group’s improved credit standing.
Milan, June 11, 2004 - Moody’s announced today that it changed from negative to positive the outlook of Edison’s Baa3 long-term rating. This change was justified by the improved operating and financial results achieved in 2003, the Company’s enhanced liquidity made possible by transactions to rationalize its debt structure and the expectation that its main financial ratios will remain stable despite an ambitious capital investment program.
Moody’s also stated that the positive outlook implies the possibility of a further improvement in credit rating, if the current uncertainties about EDF’s standing as a stockholder and the handling of its voting rights can be resolved favorably.
Just a few days ago, on June 7, the Standard&Poor’s rating agency announced that it had boosted Edison’s long-term rating to BBB+, stable outlook, and affirmed the A-2 short-term rating.
S&P indicated that the rating improvement rewarded the Company’s success in strengthening its financial position more quickly and to a greater extent than originally anticipated, and reflected the perception of a reduced level of business risk and the neutrality of the stakeholders' structure in the improvement of Edison’s credit quality.
Standard&Poor’s noted that Edison strengthened significantly its financial profile in 2003, as a reduced and restructured indebtedness and an increased cash flow helped bring the Company’s financial coverage ratios in line with the new rating.
According to Standard&Poor’s, the business outlook shows that there are a number of factors that mitigate the risks inherent in the market deregulation process, such as a persistent shortage of production capacity at the national level and a good balance between Edison’s production sources and destination markets.
Standard&Poor’s believes that the rating’s stable outlook is justified by the factors described above, coupled with Edison’s strengthening market position and the steady improvement of its operating and financial performance.
In issuing their credit ratings, neither of these two agencies took into account the positive impact that the injection of more than 1 billion euros in additional liquidity, generated by the conversion of warrants expiring on December 31, 2007, would have on Edison’s balance sheet.
The views expressed in the past few days by S&P and Moody’s confirm the high standing that the Edison Group enjoys among the numerous financial counterparties with whom it has completed recently important banking and capital market transactions.
