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 (defined as net debt to net debt plus equity) is likely to increase in the coming years to 44% from the current low 35%, taking into account the company'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 100% state-ownership; such support is likely to erode when concrete steps are taken to go ahead with GDF's partial privatization. GDF is responsible for nearly all of France's gas procurement (with 96% of supplies being
