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.