S&P may cut Iberdrola

Standard & Poor's said it placed on CreditWatch with negative implications its BBB+ long-term corporate credit rating and senior unsecured issue rating on Iberdrola SA and its subsidiaries Iberdrola USA, Iberdrola Renewables Holdings Inc., Scottish Power Finance U.S., Scottish Power Ltd., and related entities.

The agency said it also placed on CreditWatch negative implications its mxAAA long-term CaVal national scale issue rating on the Ps. 1.5 billion notes due 2018, issued by Iberdrola Finanzas SAU and guaranteed by Iberdrola SA.

At the same time, the agency said it affirmed its A-2 short-term corporate credit ratings on Iberdrola, Iberdrola USA, Scottish Power Scottish Power Ltd. and related entities.

S&P said the CreditWatch placement follows the downgrade of the Kingdom of Spain to BBB-/A-3 from BBB+/A-2 on Oct. 10. The outlook on Spain remains negative.

The agency said it assesses Iberdrola as having high exposure to domestic country risk as it derived about 47% of revenues from Spain in 2011. Furthermore, the agency said it sees risks that Iberdrola will struggle to achieve and maintain credit ratios commensurate with the BBB+ rating.

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