...Limitations of a Single Metric: Fitch Ratings analyses numerous operational and credit metrics in assigning credit ratings. Funds from operations (FFO) net adjusted leverage and net debt to regulatory asset base (RAB) are key differentiators for regulated network utilities, but no single metric drives ratings. Ratings are affected by the balance of various ratios, which change with industry fundamentals, and are benchmarked against those of key peers. We also assess coverage ratios, which currently tend to reflect the favourable funding environment and are typically at comfortable levels. A guide to credit metrics can be found in Fitch's Corporate Rating Methodology. Metric Disparity: In the regulated networks sector, companies may in some instances have relatively high FFO net adjusted leverage coupled with a conservative net debt-to-RAB ratio (when compared to the respective rating level) or vice versa, as the same amount of RAB can generate different levels of FFO (plus net interest)....
