Fitch downgrades Vattenfall

Fitch Ratings said it downgraded Vattenfall AB’s long-term issuer default rating and senior unsecured rating to BBB+ from A-.

The outlook is stable.

Fitch also assigned a BBB- rating to Vattenfall’s hybrid securities issued in 2015.

The downgrades reflect pressure on cash flow in Vattenfall’s key operating segment, power generation, due to declining achieved power prices in the next few years and an expectation that the negative leverage guidance for the previous A- rating will be breached within the rating horizon, the agency said.

This is despite a modest de-leveraging resulting from continued asset disposals and the hybrid bond issuance, Fitch said.

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