Fitch drops Edison to junk

Fitch Ratings said it downgraded Edison SpA's long-term issuer default and senior unsecured rating to BB- from BBB- and its short-term issuer default rating to B from F3.

The ratings were also placed on Rating Watch evolving, according to the agency.

The downgrade is driven by the negative impact of the prolonged negotiation process undertaken by Edison's shareholders, EDF SA (A+/stable) and its Italian counterparties grouped in Delmi Spa, the agency noted.

"Against a backdrop of increasingly difficult credit market conditions and a challenging macroeconomic environment, the prolonged delay in the negotiation process has limited the company's ability to focus on key management functions, including the planning of funding and liquidity requirements, to the extent that the company is no longer commensurate with an investment grade credit profile," Francesca Fraulo, a director at Fitch, said in the release.

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