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French state-owned utility Electricité de France S.A. (EDF) has been downgraded to BBB+ from A- by Fitch. Further, its ratings have been placed on Rating Watch Negative by Fitch, review for downgrade by Moody’s (A3) and CreditWatch Negative by S&P (BBB+). The rating actions are on the back of:
Fitch estimates that the above would have a material adverse impact on EDF’s financials, estimating a Fitch-defined EBITDA for 2022 at €4bn, 75% below its previous estimate. S&P too said that this could lead to a €10-13bn cut in EDF’s 2022 EBITDA from its previous assumption of €17.9bn. As per Fitch, EDF estimates a €8.4bn impact to 2022 cash EBITDA based on market prices at end-2021.
EDF’s EUR 5.375% Perps traded ~0.6 points lower to 108.46 yielding 2.44% currently.