...October 13, 2022 - The current challenges in Europe's energy environment make the split of Naturgy into two entities, MarketsCo and NetworksCo, unlikely over 2022-2023, which prolongs the uncertainty surrounding Naturgy's strategic direction. - While the questions surrounding Naturgy's strategy overshadow our expectation of a strong financial performance over 2022-2023, such performance makes a credit metric-driven downgrade less likely, both under a split or a constant-perimeter scenario. - On Oct. 13, 2022, Naturgy announced its intention to call the outstanding 500 million perpetual non-call 4.125% notes, which have a first call date on Nov. 18, 2022, and we assume the company will not replace it. This is leading us to revise the equity content on all of Naturgy's 1.5 billion hybrids to minimal from intermediate. - We see this decision as aggressive because it restricts the company's future use of this instrument. - Still, we expect the company will be able to absorb the increase in...
