Summary: Red Electrica Corporacion S.A. May 09

Standard & Poors, May 2009

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

This product consists of a Summary Analysis: Bi-annual (at least). An abbreviated analysis containing Standard & Poor's issuer credit ratings as of the time the article was published. The analysis includes a rating rationale - the basis on which the rating was assigned - and an outlook section if the issuer is not on CreditWatch. Financial statistics are not included.

Abstract
The ratings on Red El-ctrica Corporaci-n S.A. and its subsidiary Red El-ctrica de Espa-a S.A.U. (together, REE)--Spain's electricity system operator and owner of the bulk of the country's electricity transmission grid assets--reflect the group's stable regulated cash flows, supportive regulatory framework, and strategic importance for the Spanish government's energy and economic policy. Diversification activities are minimal, carried out through legally separated subsidiaries, and financed on a nonrecourse basis. The ratings are constrained by REE's moderately aggressive capital structure--with gearing (debt to debt plus equity) of 69%--which reflects the debt-financed acquisition of transmission assets. In addition, REE has a large -4 billion capital-investment program between 2009 and 2013 that it must finance. In July 2008, to comply with Spain's new electricity...

Companies mentioned in this report are: Red Electrica Corporacion S.A.,Red Electrica de Espana S.A.U.
Action: Review

Red Electrica Corporacion S.A.,Red Electrica de Espana S.A.U.

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