Investing.com -- Moody’s Ratings has changed SNAM S.p.A.’s outlook to positive from stable while affirming its Baa2 long-term issuer rating, the rating agency announced Friday.
The rating action follows SNAM’s November 14 announcement that it terminated an agreement to acquire 24.99% of Viergas Gas Holding’s capital from null Investments. VGH indirectly owns Germany’s largest gas transmission network operator, Open Grid Europe GmbH.
Moody’s positive outlook reflects its expectation that SNAM’s credit metrics could support a higher rating, given reduced minimum credit metric requirements for a Baa1 rating. The company recently announced that its 2025 EBITDA is expected to be €0.1 billion higher and net debt €0.4 billion lower than previously anticipated.
For a Baa1 rating, Moody’s now expects SNAM to maintain Funds from Operations (FFO)/net debt of at least 12% on a sustained basis, down from previous guidance. This adjustment reflects the company’s reduced exposure to new hydrogen infrastructure outside Italy following the terminated agreement.
Moody’s anticipates SNAM will show FFO/net debt around 12% from 2025 to 2027, well above the 9% minimum required for its current Baa2 rating. The company will benefit from avoiding a €940 million payment previously expected in 2026 for the VGH stake acquisition.
SNAM plans to present its updated strategic plan in Q1 2026. Moody’s does not expect major strategic changes, though the company is reviewing its associates portfolio.
The Baa2 rating continues to be supported by SNAM’s strategic position in Italy’s gas transmission, storage and regasification, its role in the country’s energy plan, and its mostly regulated activities with predictable regulation.
Income from associates remains material to SNAM’s financial performance, with steady growth expected to continue through 2029, reaching approximately €350-370 million from €326 million in 2024.
SNAM is considered a Government-related Issuer due to its 31.35% ownership by CDP RETI S.p.A. Moody’s also affirmed the Ba1 rating on SNAM’s perpetual subordinate debt.
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