S&P downgrades RWE

Standard & Poor’s said it lowered the long-term corporate credit rating on RWE AG and its subsidiaries, Essent NV and Essent Nederland BV, to BBB from BBB+.

The outlook is negative.

The agency also said it affirmed RWE’s short-term rating at A-2 and lowered the ratings on its senior unsecured debt to BBB from BBB+ and on its junior subordinated debt to BB+ from BBB-.

Essent and Essent Nederland are core subsidiaries of the RWE group and viewed as fully integrated businesses, S&P said.

The downgrades are due to concerns that RWE will not be able to maintain credit metrics at the high end of the range associated with its significant financial risk profile, the agency said.

The downgrades also reflect a revised base-case forecast that adjusted funds from operations-to-debt might remain at about 18% over the next two years, assuming no material developments on the funding of nuclear obligations, S&P said.

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