Karlsruhe. The rating agency Moody’s today announced a new rating opinion for EnBW Energie Baden-Württemberg AG. The baseline credit assessment was downgraded by one notch to baa1 from a3. At the same time, the equity holding of the Federal State of Baden-Württemberg, which amounts to 46.75%, was factored into the credit rating. The overall rating therefore remains at A3. The outlook continues to be negative. As part of its new credit rating assessment, Moody's has given EnBW's hybrid bond issued in October 2011 and April 2012 an unchanged rating of Baa2.
Moody's downgrading of the baseline credit assessment by one notch was mostly attributable to the expectation that pressure on earnings from generating electricity was set to grow. In this context, the rating agency makes reference to the structural changes in the German energy markets and the swifter-than-expected decline in electricity prices.
Moody's assumes that higher earnings from other business segments and the Group's hedging strategy will partly contribute to cushioning the decline in the Electricity Generation Segment. Nonetheless, Moody's anticipates a weaker financial profile despite the positive measures which EnBW has already implemented in recent years. EnBW's CFO Thomas Kusterer underscored the following: "The affirmation of the A3 rating in the current environment shows that Moody's acknowledges our stable shareholder structure as well as the measures we have taken over the last two years and the steady, positive cash flow. We intend to bolster the confidence of the capital markets in EnBW's financial strength by aligning our investments towards progress made with our divestiture programme."
The negative outlook is mainly a reflection of the still strong structural pressure on the generation business and current uncertainties about the German market structures. Moody's also sees an execution risk in the swift expansion of earnings in the Renewable Energies Segment and in new fields of business.
Thomas Kusterer emphasised the following: "A good rating is important for conserving our competitiveness and sustainability. We regard the current assessment as an incentive for suc-cessfully implementing our EnBW 2020 Strategy. We are now called on to translate the potential from the "Energiewende" into major contributions to earnings."