Moody's downgrade of ENA rating will not affect financial stability – head of Central Bank of Armenia

YEREVAN, September 16. /ARКА/. Central Bank of Armenia governor Martin Galstyan has provided comments regarding the recent downgrade of the Electric Networks of Armenia CJSC (ENA) rating by the international rating agency Moody's.

Moody's has lowered the long-term corporate rating (CFR) of Electric Networks of Armenia CJSC (ENA) from "Ba2" to "Ba3" and the probability of default rating (PDR) from "Ba2-PD" to "Ba3-PD". Additionally, the outlook has shifted from "stable" to "negative".

"I am optimistic that the situation concerning ENA will be resolved promptly, leading to a short-term downgrade of the rating. I do not anticipate any long-term repercussions, particularly regarding financial stability," stated Galstyan in response to an inquiry from ARKA news agency about the potential effects on Armenia's financial stability and investment appeal.

Moody's indicates that the downgrade is a reflection of the company's heightened vulnerability to state influence and regulatory risks, stemming from legislative changes expected to be enacted in July 2025.

These changes would empower the government to nationalize the company and enable the regulator to initiate specific administrative actions in certain circumstances.

Tashir Group President and ENA owner Samvel Karapetyan has been detained since June 18 on allegations of publicly advocating for the seizure of power in Armenia. The day prior, he expressed his support for the Armenian Apostolic Church and Catholicos Garegin II amidst governmental criticism.

In the aftermath, Armenian Prime Minister Nikol Pashinyan declared that ENA, which is owned by the company, would undergo nationalization and be placed under state control. On July 3, parliament passed amendments to the laws "On the Public Services Regulatory Authority" and "On Energy", facilitating the nationalization of ENA.