Moody's lowers Vattenfall view to negative

Moody's Investors Service said it changed Vattenfall AB's outlook to negative from stable.

Moody's also said it affirmed the company’s long-term A3 issuer and senior unsecured ratings, Baa2 hybrid instrument ratings and the prime-2 short-term rating.

The outlook revision considers Vattenfall's financial leverage in the context of the company's business risk profile and slower than previously anticipated shift in earnings toward lower risk regulated and contracted cash flows, the agency said.

Vattenfall's strategy targets a transition to clean energy with a major focus on expansion in contracted renewables and regulated activities, Moody's said, but the pace of change has been slower than anticipated.

The ratings are supported by the company's breadth and scale of operations, along with its clean generation portfolio in the Nordics and moderate contribution from regulated electricity distribution and district heating activities.

These factors are balanced by Vattenfall's fairly material exposure to conventional power generation, which accounted for about 35% of underlying EBITDA in 2018, Moody's said.

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