S&P Keeps NEK Rating on CreditWatch Negative on Refinancing Execution Risk

S&P Keeps NEK Rating on CreditWatch Negative on Refinancing Execution Risk

Standard & Poor's said it kept its BB- long-term corporate credit rating on Bulgarian state-owned electricity utility NEK on CreditWatch Negative, where it was placed on December 20, 2012.

NEK is a subsidiary of the state-owned Bulgarian Energy Holding (BEH).

The ongoing CreditWatch placement reflects S&P view of the risk associated with the refinancing of NEK's 195 million euro ($250.2 million) syndicated loan, which matures in May 2013 after NEK extended it for a year, the rating agency said.

"We understand that BEH has received a number of committed offers for its two alternative proposals to raise 250 million euro either in the form of bonds (with a bridge loan) or a bank loan. BEH aims to receive the funds before the maturity of NEK's 195 million euro syndicated loan and 70 million levs (35 million euro) shareholder loan in May 2013," the ratings agency said. "Although we believe that BEH has taken steps to reduce the high degree of refinancing risk, we still see some remaining execution risk while BEH selects the winning bid and completes the contractual arrangements."

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