French Utility EDF Downgraded To 'BBB+' On Prolonged Operational Weakness, Lower Output Due To COVID-19; Outlook Stable

Electricite de France S.A. (EDF) has sharply revised its French nuclear output for 2020-2022 because of more COVID-19-related outages and a shift in maintenance work schedules over the next two years. The prolonged lower nuclear availability reflects greater operational weakness, which will contribute to a significant decline in profitability (EBITDA €5 billion-€6 billion lower in 2020-2022 than pre-pandemic; but some upside if the recovery is stronger than expected). Hence, we are revising down our business risk assessment to satisfactory from strong. We expect the group to work on extensive financial remedies, but still anticipate debt and asset retirement obligation (ARO)-related liabilities will increase substantially in 2020. We are lowering our long-term rating on EDF to 'BBB+' from 'A-'. We are

...June 22, 2020 - Electricite de France S.A. (EDF) has sharply revised its French nuclear output for 2020-2022 because of more COVID-19-related outages and a shift in maintenance work schedules over the next two years. - The prolonged lower nuclear availability reflects greater operational weakness, which will contribute to a significant decline in profitability (EBITDA 5 billion-6 billion lower in 2020-2022 than pre-pandemic; but some upside if the recovery is stronger than expected). Hence, we are revising down our business risk assessment to satisfactory from strong. - We expect the group to work on extensive financial remedies, but still anticipate debt and asset retirement obligation (ARO)-related liabilities will increase substantially in 2020. - We are lowering our long-term rating on EDF to '###+' from 'A-'. - We are lowering our long-term rating on EDF's U.K. subsidiaries, EDF Energy PLC and EDF Energy Customers PLC, to '##+' from '###-' - We are lowering our long-term issuer and...

Ratings Action