Natural monopoly. High degree of cash flow certainty. Adequate financial profile. Expected shareholder and government support. Parent company's other businesses are weaker. SP PowerAssets Ltd. (SPPA) is a wholly owned subsidiary of Singapore Power Ltd. (SingPower, AA/Stable/--). SPPA owns the electricity transmission and distribution (T&D) assets in Singapore. It also holds the sole license for electricity T&D in Singapore. For the year ended March 31, 2005, SPPA generated operating revenues of Singapore dollars (S$) 1.27 billion (US$763 million), net income of S$306 million, and funds from operations (FFO; defined as net income, plus noncash and extraordinary expenses, minus noncash and extraordinary income) of S$807 million. The rating on SPPA is based on the following strengths: SPPA is a natural monopoly.
