Financial policy & credit ratings

Financial policy & credit ratings

The aim of our financial policy is to ensure that we continue to have adequate and timely access to the international capital and money markets. We seek to optimise Enexis Holding’s funding structure and funding costs, whilst at the same time minimising its risk exposure.

The company’s financial policy is approved by the Executive Board and implemented by the Treasury department.


The Treasury department has no profit target and pursues a conservative policy in terms of open financial positions and derivatives. Treasury acts in accordance with its mandate, as detailed in the Treasury Charter, and within the statutory framework of the Dutch Electricity and Gas Act, the Independent Grid Management Act and the Financial Management (Grid Operators) Decree.

The department’s main duties are to advise on and implement external and internal funding transactions, conduct day-to-day cash management, and mitigate credit, currency, inflation and interest rate risks.

Dividend policy

Our dividend policy is based on a payout ratio, defined as a percentage of Enexis Holding N.V.’s net profit on ordinary activities. Since the 2014 financial year, the dividend payout ratio has been capped at 50% of the net profit, with a minimum annual target payout of EUR 100 million. This percentage will be reduced if the payout means that the company may lose its A rating within five years.

Banking policy

We seek to build and maintain long-term relationships with a minimum of six banks (core banking group) so as to ensure the availability of adequate stand-by lending facilities. The core banking group includes Netherlands-based and international banks, all of which being of good standing and having a wide range of products and strong credit ratings.

Credit rating policy

Enexis B.V. and Enexis Holding N.V. have been assigned credit ratings by Standard & Poor’s (S&P) and Moody’s.

We seek to have an A rating profile, defined as a credit rating of at least A flat/A2 with a stable outlook. This credit rating target provides a buffer relative to the statutorily required minimum creditworthiness of an ‘investment-grade rating (BBB/Baa2)’ for Enexis B.V., as referred to in the Financial Management (Grid Operators) Decree.

The A rating profile is in line with the regulatory weighted average cost of capital (WACC) principles and, hence, in line with the compensation for funding costs. In order for Enexis Holding N.V. and Enexis B.V. to continue to have identical ratings, it is our policy to limit as much as possible the ‘structural’ subordination of debt.

Current credit ratings

​Short Term A-1​ P-1​
​Long Term A+ (stable outlook)​ Aa3 (Stable outlook)​
Long Term A+ (stable outlook) Aa3 (stable outlook)

Target financial ratios

Our target financial ratios are based on:

  • the minimum financial ratios prescribed by the Financial Management (Grid Operators) Decree
  • a conservative financial business policy and associated ratios designed to retain our credit rating target
  • the regulatory WACC as a basis for the return on capital to be achieved

Statutory ratios

Under the Financial Management (Grid Operators) Decree, Enexis B.V., in its capacity as a grid operator, has a statutory obligation to achieve the following minimum financial ratios in terms of its interest coverage, debt coverage and capital structure:

  • EBIT interest coverage >=1.7 x
  • FFO interest coverage >=2.5 x
  • FFO/Total debt >=11%
  • Total debt/(equity + total debt) <=70%

Additionally, the Decree requires that, at the time of its incorporation, Enexis’ total debt in relation to equity + total debt must not exceed 60%. This ratio is allowed to rise to no more than 70% if the company needs to make mandatory investments in the regulated grids.

Alternative tot the statutory ratios

As an alternative to the statutory ratios, a grid operator may obtain a minimum BBB/Baa2 investment-grade rating. In such cases, the statutory obligations will have been met with the credit rating and achieving the reported ratios will no longer be required.

To support the objective of having a stable credit rating at the proposed level, management uses the following ratios for both Enexis Holding N.V. (consolidated) and Enexis B.V. as a minimum standard for their financial policies:

Target financial ratios for Enexis Holding N.V. and Enexis B.V.

  • FFO interest coverage >=3.5 x
  • FFO/net interest-bearing debt>=16%
  • Net interest-bearing debt/(equity + net interest-bearing debt) <=60%

These ratios provide a buffer relative to the minimum ratios stated in the Financial Management (Grid Operators) Decree and hence form the basis for Enexis’ financial policy and Planning & Control cycle. By meeting these ratios, we expect to have sufficient potential and flexibility for growth and future investment.

Relevant laws & regulations

The financial policy requirements applicable to Enexis Holding are based on the Dutch Gas and Electricity Act 2003, the Independent Grid Management Act 2006 and the Financial Management (Grid Operators) Decree 2008.

It is our policy to continue to comply with relevant laws and regulations by using appropriate funding structures and ensuring that we more than meet the statutory financial ratios or credit rating.