(The following statement was released by the rating agency)
Apr 05 -
-- Israel’s electricity monopoly Israel Electric Corp. Ltd. (IEC) continues to face liquidity pressure due to a lack of gas supply from Egypt and depleting domestic reserves, both of which are forcing the company to procure more expensive fuels.
-- Although the Israeli government is implementing a financial support package to IEC, we note that this will increase the company’s debt burden and that a long-term solution to fully recover all costs, and to sustainably strengthen IEC’s “weak” stand-alone liquidity, remains to be found.
-- We are therefore placing our ‘BB+’ foreign currency long-term corporate credit rating on IEC on CreditWatch negative.
-- The CreditWatch placement reflects the possibility of us downgrading IEC by up to two notches if we believe that short- and long-term funding measures are not implemented in a full or timely manner.
On April 5, 2012, Standard & Poor’s Ratings Services placed its foreign currency ‘BB+’ long-term corporate credit rating on Israel’s electricity monopoly Israel Electric Corp. Ltd. (IEC) on CreditWatch with negative implications. At the same time, we placed our ‘BB+’ issue rating on IEC’s senior secured debt on CreditWatch with negative implications.