PGE received an A3 rating from Moody’s Investors Service, while Fitch Ratings assigned a BBB+ rating to PGE itself and an A- rating to PGE’s unsecured debt. Both ratings were assigned a stable outlook. The ratings place PGE among the best-rated Polish companies, by both Moody’s and Fitch. The agencies also assigned ratings to specific countries. The ratings for Poland itself—A2 from Moody’s and A- from Fitch—are only slightly higher than PGE’s ratings.

“PGE is the leader of the Polish utility industry, and we expect to maintain this position, at the least,” said Wojciech Topolnicki, Vice-President of the PGE Management Board for Development and Finance. “This is also confirmed by the analyses of the ratings agencies. The Moody’s and Fitch reports indicate that in terms of credit quality, we have an excellent opportunity to aspire to be one of the top few among the largest European power companies.”

The ratings are classified as investment grade. The A3 rating assigned by Moody’s confirms a high ability by PGE to service its obligations, and that debt securities issued by the company are subject to low credit risk. The BBB+ rating given by Fitch indicates an adequate ability by PGE to meet its financial commitments, although this may be affected by changing business or economic conditions. The agency nonetheless believes that the default risk is low. The A- rating assigned to PGE’s debt by Fitch indicates an expected low credit risk and high capacity to meet financial commitments.

“We are among the best-rated Polish companies,” said Wojciech Topolnicki. “This is very important for us, because our development strategy calls for significant investments, which we intend to finance from various sources, including loans and debt securities. We expect that some of the funds will be raised form the issue of Eurobonds. In order to place them effectively on international markets, we needed confirmation of our creditworthiness.”

In their ratings, analysts from both agencies emphasize as strengths of PGE its position of leader on the Polish market and its vertically integrated business model, with a presence on all levels of the value chain in the utility industry, from mining and power generation through wholesale, distribution and retail (under law, transmission must be handled by another firm). Both agencies appreciated PGE’s strong financial foundations and conservative debt financing policy, as confirmed by the low level of debt (at about 0.87x of EBITDA as of the end of 2008, a fraction of the average in the European utility industry). They pointed however to the ambitious investment program and resulting need for financing, and the associated possible increase in debt indicators. PGE’s strategic importance for the Polish utility industry and the related support of the Polish government are also significant for the agencies.

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Additional information on ratings

Credit ratings assist investors in analyzing credit risk for such instruments as issues of debt securities, like corporate bonds. Independent ratings from agencies like Moody’s and Fitch help improve the effectiveness of decision-making on the market for bonds and other instruments by providing a reliable and independent assessment of credit risk.

The agencies Moody’s and Fitch give awards using a scale with several levels, with AAA in both instances indicating a very low credit risk and the highest quality debt securities. The highest ratings are referred to as “investment grade.” At the other end of the scale are ratings classified as “speculative,” indicating a lower grade of debt securities. They are subject to higher risk of deferral of interest payments, or in extreme cases a total default.

Ratingi - Fitch	Ratingi - Moody's
AAA	Aaa	Investment grade
AA+, AA, AA-	Aa1, Aa2, Aa3
A+, A, A-	A1, A2, A3
BBB+, BBB, BBB-	Baa1, Baa2, Baa3
BB+, BB, BB-	Ba1, Ba2, Ba3	Speculative grade
B+, B, B-	B1, B2, B3
CCC+, CCC, CCC-	Caa1, Caa2, Caa3
CC	Ca
C	C
DDD
DD
D

PGE Polska Grupa Energetyczna S.A. is the largest energy group in Poland and one of the largest in Central and Eastern Europe. Thanks to combination of its own fuel resources (lignite), power generation capacity and distribution networks, PGE guarantees secure and stable supplies of electric power to ca. 5m households, companies and institutions. 

Annual production of electric power totals over 56 TWh net, which represents 42% of Poland's production capacity. The installed capacity is 12.4 GW.  
PGE Group has been operating in its present form since 2007. Its core areas of operations include lignite mining and generation of electric power and heat from conventional sources, wholesale of electric power and related products, retail sale of electric and heat power, and generation of electric power from renewable energy sources.

Contact for press:

Jacek Strzałkowski
PGE Polska Grupa Energetyczna S.A.
Spokesperson
e-mail: jacek.strzalkowski@pgesa.pl
tel.: +48 (22) 340 19 32