S&P puts EDF on watch

S&P said it placed its BBB Electricite de France SA ratings on CreditWatch with negative implications. The agency also placed the BB ratings on EDF Energy plc and EDF Energy Customers plc and the BBB long-term ratings on Edison SpA, since the entity's creditworthiness is capped at the level of EDF's, on negative watch.

“The CreditWatch placement follows EDF's announcements on further outages of its domestic fleet and of issues at its U.K. new-build project. On May 19, 2022, EDF revised down its French nuclear output for 2022 by 15 terawatt hours (TWh) to 280TWh-300TWh. The revision was prompted by the discovery, during maintenance checks, of further corrosion defects and ensuing repair needs, prolonging outages at 12 of EDF's 56 reactors in France. This compares to a production of 361TWh in 2021,” the agency said in a press release.

Along with other issues EDF is facing, S&P said it estimates a mid-single-digit billion-euro EBITDA loss, as well as a substantial increase in S&P Global Ratings-adjusted debt in 2022-2023. The agency is expecting a weakening in EDF's 2023 credit metrics to ranges below the thresholds for the current ratings.

S&P said it aims to resolve the CreditWatch once it has more clarity on the updated financial effect and estimates for 2023.

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