Moody’s downgrades Osaka Gas

Moody's Investors Service said it downgraded Osaka Gas Co. Ltd.’s senior unsecured bond rating to A1 from Aa3.

“The downgrade reflects Osaka Gas' strong appetite for capital investments which will likely keep its leverage high for an extended period,” said Yukiko Asanuma, a Moody's analyst, in a press release.

“We expect the company will remain highly reliant on debt to fund investments, including in power generation and overseas projects, and that it will take several years for such investments to start generating material cash flow.”

The outlook is stable, which mirrors the view that Osaka Gas will keep its strong market position and keep cash flow from operations pre-working capital less dividends/debt in the mid- to high-teen range in percentage terms, Moody’s said.

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