Moody's lifts Avon Energy from junk

Moody's Investors Service said it upgraded Avon Energy Partner Holdings senior unsecured debt rating to A3 from B3 and upgraded the Baa3 issuer rating of Central Networks West and the Baa3 guaranteed by Central Networks West debt rating of Central Networks plc to A3 following the implementation of a guarantee by E.ON UK plc (A3; outlook stable) in favour of the Avon Energy Partner Holdings bondholders.

E.ON UK plc is a wholly owned, vertically integrated U.K. power utility subsidiary of E.ON AG (Aa3; outlook stable), itself a diversified European utility, based in Germany.

Moody's said it upgraded Avon's rating due to the establishment of an irrevocable, unconditional guarantee by E.ON UK plc in favor of the holders of Avon bonds. The guarantee is in favor of the current holder, which is an entity of the E.ON group and potential future ones, in case the bonds are transferred to other entities or persons.

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