We expect tough industry conditions to continue in Sweden-based power and heat provider Vattenfall AB's power generation business in Germany and the Nordic region over the next few years. However, we assume that the related constraints to Vattenfall's earnings profile and credit measures will be mitigated by the group's growth in regulated electricity distribution and district heating operations, the planned sale of its German lignite operations, substantial power price hedges, and our view of the high likelihood of a reduction in Swedish nuclear taxes. We are affirming our 'BBB+' long-term corporate credit rating on Vattenfall and removing it from CreditWatch with negative implications. The negative outlook reflects our view that the group would be reliant on external factors, such as
