Bord Gáis, ESB ratings upgraded

Credit ratings agency Moody’s has upgraded Bord Gáis and the ESB, giving both a stable outlook.

They have been upgraded from a credit rating of ‘Baa2’ to ‘Baa1’, with the moves following Moody’s recent upgrading of Ireland’s overall credit rating.

In the case of Bord Gáis, which recently sold its energy retail arm, Moody’s said its rationale was based on the company no longer being constrained by Ireland’s government bond rating. The “negative factors weighing on Bord Gáis Eireann’s credit profile have reduced”, the agency said.

The stable outlook reflects Moody’s expectation that Bord Gáis will “maintain credit metrics in line with guidance”.

“The agency understands that Bord Gáis Eireann is expected to face no financial exposure in relation to the transition of Irish Water to a customer paying model,” the statement added.

Moody’s said its rating on Bord Gáis could increase further if there is no material increase in its financial risk profile and there is long-term visibility on its future financial policies in the aftermath of the sale of the Bord Gáis Energy division.

In the case of the ESB, Moody’s said the company has pursued “a prudent financial strategy, with careful management of its capital investment programme”, adding that it benefits from a solid liquidity position with reported cash and available credit facilities of €1.9bn as of the end of last year.