State-owned Genesis Energy plans to raise up to NZ$225 million through the issue of 5 and 7 year bonds aimed at retail investors. The proceeds from the BBB plus rated unsecured and unsubordinated bond issue will be used to repay existing bank debt of NZ$275 million due to mature in October next year.

Standard and Poor's said the bonds were not guaranteed by the government but were "underpinned by the company's reasonably diversified generation portfolio, solid retail market position, and prudent liability management."

" These strengths are somewhat offset by the weakening of Genesis Energy's credit-protection metrics, largely a result of the company's substantial investments to secure long-term fuel supplies, and also the potential for Genesis Energy to be adversely affected by the implementation of a carbon emissions trading scheme (ETS) from January 2010," S&P said.

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