BAKU, Azerbaijan, April 4. Moody's Ratings
(Moody's) has upgraded to Baa1 from Baa2 SNAM S.p.A. (SNAM)'s
long-term issuer rating, the senior unsecured ratings and the
senior unsecured ratings of the group's revolving credit
facilities, Trend reports.


“We have also upgraded the provisional senior unsecured rating
on SNAM's EUR 15 billion EMTN program to (P)Baa1 from (P)Baa2, as
well as SNAM's perpetual junior subordinate debt rating (Hybrids)
to Baa3 from Ba1 and its Baseline Credit Assessment (BCA) to baa1
from baa2. At the same time, we have affirmed SNAM's Prime-2
short-term Commercial Paper rating. Concurrently, we have changed
SNAM's outlook to stable from positive,” said the rating
agency.


SNAM is the main operator of gas transport, storage and
regassification assets in Italy. As of the end of December 2025,
the company's asset base included around 38,000 kilometres of
transportation pipeline network in Italy and abroad, 12 storage
concessions, one regasification facility, and three floating
storage and regasification units.


The rating action follows the presentation of SNAM's new 2026–30
strategic plan.


“It reflects our expectation that SNAM's financial metrics will
be broadly commensurate with our ratio guidance for a Baa1 rating,
namely a funds from operations (FFO)/net debt ratio of at least 12%
on a sustained basis,” the report reads.


Moody’s analysts anticipate SNAM's business risk profile will
improve upon execution of the business plan, underpinned by its
exclusive focus on regulated activities, lower dependence on
associates' dividends, and the absence of investment into hydrogen
infrastructure until 2030.


“This also takes into account our expectation that the
regulation in Italy will remain supportive amid transitioning
toward a full totex regime. From a financial perspective, we expect
SNAM to maintain FFO/net debt around 12% over 2025 to 2027, as per
management's commitment. In the longer term, we anticipate the
portfolio rotation will be instrumental in sustaining financial
metrics commensurate with our ratio guidance,” says the report.







The rating upgrade also continues to recognize the company's
strategic position in the transmission, storage and regasification
of natural gas in Italy, its strategic role in executing on the
country's energy plan, and the mostly regulated nature of its
activities which enjoy predictable, transparent, supportive
regulation, as evidenced by the regulator's aim to smooth the
transition towards a totex regime of economic regulation for gas
transmission.


Moody’s notes that minority investments in pipeline and other
gas infrastructure have been a significant part of SNAM's business
profile.


“While the disposal program will reduce the weight of associates
in the group's financial performance and hence FFO, associates will
remain substantial. However, we anticipate that their regulated
activities, combined with their somewhat moderate leverage, will
sustain dividend flows over the foreseeable future.


More broadly, SNAM's rating remains underpinned by the low
business risk profile of its monopoly-like gas transport and
storage activities within an established and supportive regulatory
framework; the stability and predictability of its cash flow; its
strategic focus on upgrading and developing its domestic
infrastructure; its good cash flow generation and sound
liquidity.”


At the same time, the rating agency points out that these
positives are partly offset by SNAM's gradually increasing
investments in regulated assets, amid growing uncertainties linked
to the energy transition. Further offsetting factors are cash flow
exposure to dividend payments from associates.