Short term rating affirmed at "A-2"
Milan, November 2, 2010 – Edison informs that Standard&Poor’s downgraded today the long term senior unsecured ratings of Edison SpA to “BBB” from “BBB+” with a Stable Outlook.
The stable outlook reflects Standard&Poor’s view that the company should be able to comfortably keep the financial parameters in line with the new rating level.
The short-term corporate credit rating on Edison was affirmed at “A-2”.
According to Standard&Poor’s, the downgrade reflects the deterioration of market conditions in Italy determined by the decline in power and gas demand. The subsequent increased pressure on earnings led to consider Edison’s financial profile to be not anymore in line with the parameters established to keep the BBB+ rating. According to Standard&Poor’s, Edison’s financial profile was also pressured by the increase in debt following the purchase of the Abu Qir concession field. S&P has furthermore adjusted the debt as a result of the commissioning of the Rovigo LNG Terminal.
S&P acknowledges Edison’s well-established position as Italy’s second-largest electric and gas group, its efficient generation fleet and its increased focus on profitability and financial discipline also thanks to the reduction of capital expenditures.
Edison has already started a series of operational measures which should enable the Company to strengthen its financial flexibility and adapt its strategy to the changed market conditions, thus reducing the impact of the economic downturn on the Group’s profitability. The company is more specifically focusing on measures to enable to recover margins in the gas business which was strongly penalized by the long term contracts which are now under a renegotiation process.
