Moody's may downgrade Italy's Eni and Enel

In a statement, Moody's said the ratings of Italian government-related issuers Enel, Eni, Finmeccancia , Terna and Poste Italiane had been placed on review for possible downgrade.

On Friday Moody's threatened to cut Italy's credit ratings on worries that Greece's crisis may drive euro-zone interest rates higher and derail Italy's fragile economic recovery.

That move underlined the risks facing debt-burdened European nations as they struggle to bring their budgets under control and avoid the kind of crisis that has sent Greece's economy into a tailspin.

In its statement, Moody's said that Enel, 31 percent state owned, still had a somewhat weak financial profile and would need to increase cash flow, as laid out in its business plan.

Enel, which became Europe's most indebted utility after it bought Spain's Endesa , confirmed Moody's had placed its A2 long-term rating on review for a possible downgrade.

Eni, which is over 30 percent controlled by the state, had seen its financial strength weakened by investments, Moody's said, but added strong oil prices and asset sales will help offset Libyan production losses and strengthen credit metrics. Eni is the biggest foreign oil operator in Libya.

"More generally the rating reviews of the above issuers will also focus on their individual liquidity profiles and exposure to the Italian macroeconomic environment," Moody's said.

Air defence group Finmeccanica, 32 percent state-owned, could see its rating come under pressure "to the extent that underlying implicit support from the Italian government is weakened," Moody's said.

The agency noted that rising interest rates due to pressure on Italy's sovereign rating could weigh on funding requirements of power grid operator Terna.

Moody's decision on Friday to place Italy's Aa2 rating on review for downgrade reflected structural weaknesses such as a rigid labour market and highlighted concerns about funding conditions of countries with high debt levels.

Italy has one of the heaviest public debt burdens in the world, equivalent to some 120 percent of gross domestic product.