Moody’s assigns Ba2 rating to EDP notes

Moody’s Investors Service said it assigned a Ba2 long-term rating to the fixed-to-reset rate subordinated notes due 2080 to be issued by EDP – Energias de Portugal, SA.

The Ba2 rating assigned to the hybrid is two notches below EDP’s issuer rating of Baa3, reflecting the features of the hybrid. Its maturity is in excess of 60 years, it is deeply subordinated and EDP can opt to defer coupons on a cumulative basis. The rating is in line with that of the existing hybrid notes issued by the company, the agency said.

In Moody’s view the hybrid has equity-like features which allow it to receive basket C treatment (i.e. 50% equity and 50% debt) for financial leverage purposes.

The outlook is stable.

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