The ratings on French electricity incumbent Electricité de France (EDF) reflect its stand-alone creditworthiness--which would ensure an 'A+' rating--and a one-notch uplift for state support, as the group's primary focus is on nuclear power generation and the entailed significant operational risks and decommissioning liabilities. EDF's stand-alone credit quality reflects the significant contribution to earnings, especially in France, of regulated businesses; its very strong position in French generation and supply, which is underpinned by its low-cost nuclear generation fleet; the refocusing of its international operations on Western Europe; and superior free operating cash flow generation. These strengths are offset by EDF's financial profile, which remains moderate despite a late 2005 €6.35 billion capital increase. EDF also has sizable unfunded postretirement and
