Repsol's credit outlook stable after disposals

Resumen de Prensa            Enervía, lunes, 28 abril 2003

FUENTE: Platts


Fitch ratings on Friday affirmed Spanish oil and gas group Repsol's credit rating's with a stable outlook changing its negative outlook status. In particular the rating action is the result
management improvements of the Argentine business and of a steep reduction in reported net debt to some Eur7.5-bil from
Eur16.6-bil between 2001 and 2002, the ratings agency said. Argentinean interests represented some 45% of 2002 operating
income and around 41% of total assets. The reduction in net debt, partly already reflected in the rating, was largely a function
of internal cash flow generation of Eur4.8-bil, asset disposals EUR2.8-bil, changes in consolidation criteria accounting for a
cash injection of Eur3.1-bil and exchange rate effects Eur2.1-bil, Fitch said in a ratings note. Key divestment included the sale of a 23% stake in Gas Natural and an 18.55% stake in CLH (a petroleum product transport company). Debt reduction was further supported by a 40% reduction in capital expenditures to Eur2.6-bil. The latter reflects the impact of currency devaluation
as well as of caution with regards to additional investments allocated to Argentina. In addition to reduced overall debt levels,
the group s liquidity situation has improved considerably. Short-term debt obligations at the end of 2002 was Eur4-bil compared
to Eur7.6- bil in 2001. To support liquidity the group maintained committed credit lines of some Eur4-bil and held cash &
equivalent balances in excess of Eur4-bil.