...This report describes Fitch Ratings` methodology for analysing credit risk in electricity tariff deficit (TD) securitisations in Portugal and Spain. The ratings address the relative vulnerability to default of the notes, with regards to the receipt of timely interest and ultimate principal by legal final maturity, in accordance with the terms of the notes` documentation. Electricity TDs exist due to system imbalances. These include over-costs from special regime generation typically linked to renewable technologies, and over-costs attached to regulated end-user tariffs, when such tariffs do not cover the production, transport and distribution costs of electricity....
