Moody’s could cut E.ON

Moody's Investors Service said it placed the Baa1 senior unsecured ratings of E.ON SE and its guaranteed subsidiaries, E.ON International Finance BV and E.ON Beteiligungen GmbH, on review for downgrade.

Concurrently, the agency affirmed the group's P-2 short-term ratings.

Moody’s said this action reflects E.ON's exposure to a weakening power and commodity price environment.

Forward baseload prices in Germany have declined by more than 20% in the last three months, reflecting a decline in commodity prices, notably coal and CO2 which dropped by 20% and 33% during the same period respectively. Current one-year forward baseload prices of around €23/MWh are below Moody's estimates published in June 2015 of a €30-€35/ MWh range over 2015.

At the same time, prices in the Nordic region have deteriorated by around 22% in the last three months. High hydrology also affects current one-year forward baseload prices of around €18/ MWh, below Moody's estimates published in June 2015 of a €25-€30/ MWh range.

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