Moody’s affirmed the energy giant’s A3 issuer rating but added that all its ratings face a negative outlook due to the increasingly politicised operating environment for utilities amid the Competition and Markets Authority’s (CMA) probe and in the run up to the 2015 general elections.
“In addition to the more difficult operating environment in the UK, the rating agency factors in Centrica’s changing business mix as it develops and diversifies its operations. This incorporates challenging conditions in the company’s other core businesses — exploration and production — and a very competitive and rather volatile environment in the company’s growing North American operations,” Moody’s added.
Moody’s has also noted a “degree of execution risk” regarding Centrica’s disposal programme.
Centrica has recently agreed the sale of its Canadian Home Services business for around £300 million and has plans to sell off three UK gas-fired generation plants, as well as its operational wind portfolio and gas assets in Trinidad and Tobago.
The past year has also seen Centrica’s share price take a heavy hit, falling from just below 400 pence in August 2013 to around 310 pence currently.