S&P puts EDP on negative watch

Standard & Poor's said it placed its BB+ long-term corporate credit and issue ratings on Portuguese utility EDP - Energias de Portugal SA and its finance vehicle EDP Finance BV on CreditWatch with negative implications.

At the same time, the agency affirmed its short-term corporate credit debt rating on EDP at B. The 3 recovery rating on outstanding debt issues remains unchanged, reflecting the expectation of meaningful (50% to 70%) recovery if a payment default occurs.

S&P said the action mirrors its action on Portugal. Under the rating criteria, sovereign risk is a key factor that influences utilities' credit strength. The agency assesses EDP as having "moderate" exposure to Portuguese country risk based notably on the utility sector's "high" sensitivity.

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