Fitch upgrades Edison

Fitch Ratings said it upgraded Edison SpA's long-term issuer default rating and senior ratings to BB from BB- and affirmed the short-term issuer default rating at B. All ratings have been removed from Rating Watch positive, and the outlook is positive.

The upgrade follows the successful completion of the mandatory tender offer made by Electricite de France (A+/stable) for Edison's listed minority shares. Electricite de France now owns 98% of Edison's share capital.

The agency said the ratings are based on a BB- standalone rating and a one-notch uplift from Electricite de France's ownership.

The BB- standalone rating is currently constrained by leverage, liquidity pressure and a deteriorated business risk profile, Fitch said. Declining electricity and gas demand and the spread between the long-term and spot gas price are Edison's main challenges to restoring adequate cash flow generation and improving credit metrics, in the agency's view.

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