Moody’s cuts RWE debt to Baa2

Moody's Investors Service said it downgraded RWE AG’s senior unsecured ratings to Baa2 from Baa1 guaranteed subsidiary RWE Finance BV’s senior unsecured ratings to provisional Baa2 from provisional Baa.

In addition, the agency downgraded RWE's subordinated debt ratings to Ba1 from Baa3. The Prime-2 and provisional Prime-2 short-term ratings of RWE and RWE Finance were affirmed.

The outlook is negative.

Moody’s said the downgrade reflects RWE's weak business prospects as a result of low power prices and commodity prices, which have fallen since earlier in the year, as well as reduced earnings from its U.K. supply business. This weakening in RWE's business and financial profile has not been compensated by sufficient measures to strengthen its capital structure, making it unlikely that RWE could sustain a credit profile consistent with a Baa1.

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