(The following statement was released by the rating agency)HONG KONG/TAIPEI/SINGAPORE, April 08 (Fitch) Fitch Ratings has affirmed State Grid Corporation of China's (SGCC) Long-Term Foreign and Local Currency Issuer Default Ratings (IDR) at 'A+' with Stable Outlook. Fitch has also affirmed SGCC's foreign-currency senior unsecured rating and the rating on bonds issued by State Grid Overseas Investment (2013) Limited and guaranteed by SGCC at 'A+'.KEY RATING DRIVERSEqualised With the Sovereign: The ratings of SGCC are equalised with the China sovereign (A+/Stable), the company's ultimate owner, as per Fitch's Parent-Subsidiary Linkage methodology. The equalisation of SGCC's ratings with the state takes into consideration its strategic importance to China as well as strong financial and operational support extended to SGCC by the government via both monetary and regulatory policy support. Strategic Role in China: SGCC's monopoly concessions serve over 1.1 billion users in 26 provinces, or 88% of the national territory, representing approximately 80% of the nation's total electricity consumption. As the largest purchaser, distributor and retailer of electricity, SGCC also holds a critical role in the electricity value chain in China. Evolving Regulatory Environment: Fitch considers the regulatory framework to be highly beneficial to SGCC overall. Fitch expects the state to maintain tight control on electricity transmission and distribution tariffs, preserving SGCC's strong financial and strategic position.  The regulatory framework could evolve over the next decade, leading to a liberalisation of the retail segment that could be preceded by a clearer transmission and distribution tariff framework.Support from Government: SGCC has been receiving monetary and tax treatment support from the state. Most importantly, the state ensures SGCC a reasonable return on invested assets. During the next several years, the country will rely on SGCC to develop the power grid to keep pace with economic growth, facilitate changes to the coal-fired generation capacity and develop renewable energy sources. The current tariff framework and support from the government will continue to allow SGCC to maintain a robust financial profile. Strong Standalone Profile: SGCC's financial profile is robust for its 'A+' rating. Fitch expects SGCC's cash flow generation to remain strong, funds flow from operations (FFO) adjusted net leverage to remain below 2.75x and the FFO interest cover to be around 8.5x on a sustained basis (2.0x and 8.7x respectively in 2013). The company also maintains healthy liquidity and a favourable debt profile. Strong Liquidity: SGCC's liquidity position stems from its robust internal cash generation, its well-structured debt maturities, as well as its access to debt markets. SGCC has committed credit facilities from major banks of over CNY1trn. There is little secured debt (less than 5% of total consolidated debt). SGCC also centrally manages the cash flow generated by its subsidiaries. RATING SENSITIVITIESNegative: Future developments that may, individually or collectively, result in negative rating action:-A negative rating action on the sovereign -Weakening linkages with the sovereign in conjunction with deterioration in FFO adjusted net leverage to over 3.0x and FFO interest cover to less than 5.0x on a sustained basis Positive: Future developments that may, individually or collectively, result in positive rating action:-A positive rating action on the sovereign provided the linkages remain intactContacts: Primary AnalystEdwin LamDirector+852 2263 9975Fitch Ratings (Hong Kong) Ltd.2801, Tower Two, Lippo Centre89 Queensway, Hong KongSecondary AnalystAlvin ChengAssociate Director+86 21 5097 3389 Committee ChairpersonBuddhika PiyasenaDirector+65 6796 7223Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com.Additional information is available on 
  www.fitchratings.com.
  Applicable criteria, "Corporate Rating Methodology: Including Short-Term Ratings and Parent and Subsidiary Linkage", dated 5 August 2013 are available at 
  www.fitchratings.com
 Applicable Criteria and Related Research: Corporate Rating Methodology: Including Short-Term Ratings and Parent and Subsidiary Linkage
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715139
 Additional Disclosure Solicitation Status 
  http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=826411
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