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S&P Global explain EDF’s downgrade in Energy Voice

Shortly after its announcement of the new £18 billion nuclear build in the UK, Hinkley Point C, French-based company Électricité de France (EDF) was downgraded from ‘A’ to ‘A-’. S&P’s Director of Utilities, Pierre Georges, elaborates on the downgrade in an article for Energy Voice.

IPierre Georges image.PNGn the article, Georges notes that falling energy prices in France, weak cash flow and a reliance on revenues derived from an increasingly unregulated energy market – producing less predictable energy prices – have created a less stable environment for EDF. He explains that in the face of such headwinds, S&P believes the company faces increased execution and contingency risks.

However, he writes that EDF has been given a ‘stable’ outlook, as a result of the company’s ‘remedy plan’, designed to relieve debt over the next two years in cooperation with the French government. In addition, the company’s large size, low carbon-generating nuclear fleet and future incomes from a recent sale of 35% of stakes are expected to remain key strengths in regards to the company’s credit quality.

The full article can be read here.

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