Fitch may downgrade Enel debt

Fitch Ratings said it placed the A senior debt ratings of Enel SpA and Enel Investment Holding BV on Rating Watch negative. Their F2 short-term ratings and Enel's A- long-term issuer default rating were affirmed with a stable outlook.

The rating action follows the placement of Italy's A+ rating on Rating Watch negative. Fitch said the potential scope of the sovereign action may see Italy's rating lowered below the A rating on Enel's senior debt. Should that occur, the senior debt rating will be aligned with Enel's A- issuer default rating.

The agency believes that the traditionally higher rates of recovery for utility senior debt are less predictable in a distressed sovereign environment than in the case of an idiosyncratic default of a single utility.

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