Research Update: State Grid Corp. of China 'A+' Rating Affirmed With Stable Outlook; Proposed Senior Unsecured Notes Rated 'A+'

We expect SGCC to maintain stable growth in cash flows over the next two to three years, and continue to benefit from an extremely high likelihood of extraordinary government support as China's largest power grid operator. We continue to believe that China's ongoing power sector reform will have long-term positive effects on regulatory transparency but limited immediate impact on SGCC's financial performance. We are affirming our 'A+' long-term issuer credit rating on SGCC and our 'A+' long-term issue rating on all outstanding notes that the company guarantees. At the same time, we are assigning our 'A+' long-term issue rating to the proposed drawdown of senior unsecured notes under SGCC's guaranteed US$10 billion MTN program. The stable outlook on SGCC reflects

...+ We expect SGCC to maintain stable growth in cash flows over the next two to three years, and continue to benefit from an extremely high likelihood of extraordinary government support as China's largest power grid operator. + We continue to believe that China's ongoing power sector reform will have long-term positive effects on regulatory transparency but limited immediate impact on SGCC's financial performance. + We are affirming our 'A+' long-term issuer credit rating on SGCC and our 'A+' long-term issue rating on all outstanding notes that the company guarantees. + At the same time, we are assigning our 'A+' long-term issue rating to the proposed drawdown of senior unsecured notes under SGCC's guaranteed US$10 billion MTN program. + The stable outlook on SGCC reflects our stable outlook on the sovereign credit rating on China....

Research Update