Regulated monopoly electricity distributor operating under a stable and established framework Relatively simple operations, but expansive service area Exposure to volume variations and some level of unregulated services Stable and reliable cash flows due to regulated pricing Modest debt to regulated asset base (RAB; 75%) relative to sector peers High capital expenditure on assets Our 'A-' rating on ETSA Utilities Finance Pty Ltd. (ETSA) the financing arm of SA Power Networks (SAPN), is derived from our anchor score of 'a' and a one-notch downward adjustment, reflecting our expectation that the company's currently strong capital structure would be adjusted after the regulatory reset due in July 2015. We also believe that .ETSA's management is less likely to target a higher rating.
