Eneco N.V.

It is expected that, with stabilizing energy prices, the initial and variation margining due to settlement of the underlying transactions will move to normal levels in 2022/2023, which will have a positive effect on the working capital and the FFO to debt ratio. We forecast that FFO to debt will increase to above 60% in 2022, which is well above our 50% threshold for a 'bbb+' stand-alone credit profile and a rating of 'A-'. The stable outlook on Eneco reflects that on its main shareholder, Mitsubishi. It also reflects our expectation that Eneco's subsidized or long-term contracted renewable capacity and district heating operations will continue to deliver stable cash flows, underpinning the group's credit quality. Furthermore, we believe Eneco will

...Exposure to Russian long-term contracted gas is minimal. Eneco's yearly gas needs are around 6.6 billion cubic meters. The vast majority of the gas (85%-90%) that Eneco purchases through direct contracts comes from non-Russian gas suppliers; it has minimal exposure to Russian gas. In 2010, Eneco entered into a 20-year contract with Wingas. At that time, Wingas was a joint venture between Germany's Wintershall and Gazprom; it is now wholly owned by Gazprom. Eneco also had several short-term contracts with Gazprom Marketing & Trade, a Gazprom subsidiary based in London. These contracts expired at the end of March 2022 and Eneco will not be entering any new contracts with Russian gas suppliers. On April 4, 2022, the German government took over the management of Gazprom Germania, including its subsidiary Wingas (under "trusteeship"). We understand that the company will remain in Russian hands for the time being, but control rests with the German government. Eneco is continuing its contract...

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