On Sept. 25, 2008, Standard&Poor's Ratings Services placed its 'AA-/A-1+' long- and short-term ratings on French electricity incumbent Electricité de France S.A. on CreditWatch with negative implications. The CreditWatch status follows EDF's cash offer for U.K.-based nuclear generator British Energy Group PLC (BE, BB/Watch Pos/--). We do not expect a downgrade of EDF to exceed one notch. Consequently, we have not placed the ratings on EDF's subsidiary, France-based transmission operator RTE EDF Transport S.A. (AA-/Stable/A-1+), on CreditWatch with negative implications. We are prepared to allow a one-notch rating differential between EDF and RTE given the subsidiary's independence from EDF--guaranteed by law--and RTE's specific corporate governance arrangements. Likewise, the CreditWatch status does not apply to EDF's 'A' rated U.K.
