Research Update: EDF Affirmed At 'BBB/A-2' As Stronger State Support Mitigates Operational Issues And Debt Growth; Outlook Stable

We revised our view of the likelihood of extraordinary French government support to power utility Electricité de France S.A. (EDF) to very high from high. France's strong commitment to support EDF has been reinforced by recent developments in the EU energy landscape. This is linked to security of supply and state intervention, combined with the French government's supportive actions on nationalization, equity increase, and the clarification of the company's lead role in the country's highly strategic new nuclear buildup. Our base case factors in 100% state ownership of EDF and the conversion of the OCEANE convertible bonds increasing EDF's equity by €2.4 billion during 2023. We have revised down our view of EDF's stand-alone credit profile (SACP) to 'bb-' from

...- We revised our view of the likelihood of extraordinary French government support to power utility ElectricitT de France S.A. (EDF) to very high from high. France's strong commitment to support EDF has been reinforced by recent developments in the EU energy landscape. This is linked to security of supply and state intervention, combined with the French government's supportive actions on nationalization, equity increase, and the clarification of the company's lead role in the country's highly strategic new nuclear buildup. Our base case factors in 100% state ownership of EDF and the conversion of the OCEANE convertible bonds increasing EDF's equity by 2.4 billion during 2023. - We have revised down our view of EDF's stand-alone credit profile (SACP) to '##-' from '##'. The revision factors in the continued impact of ongoing operating issues on the level and predictability of EDF's power and profit generation and thus on our view of its business risk profile. These issues drove down domestic...

Research Update