The ratings reflect Gaz de France's (GDF) strong domestic market position and robust cash flow generation from its regulated domestic gas transmission and distribution activities. The company's financial policy remains conservative, but leverage (net debt to net debt plus equity) is likely to increase to 44% in the coming years, from the current low 35%, considering management's announced expansion plans. The ratings still incorporate a small degree of sovereign support, deriving from GDF's key role in France's energy policy and from its 100% state ownership; such support is likely to erode once concrete steps are taken to partially privatize the company.. GDF is responsible for nearly all of France's gas procurement (with 96% of supplies being imported) and holds practically
