S&P affirms Scottish Power

Standard & Poor's said it affirmed its A- long-term and A-2 short-term corporate credit ratings on Scottish Power Ltd. (formerly Scottish Power plc) and Iberdrola SA following the completion of the initial public offering of Iberdrola Renovables on Dec. 11 at a price of €5.30 per share.

The ratings were removed from CreditWatch with negative implications, and the outlook is stable.

The agency predicted that the €4.48 billion in proceeds from the IPO will allow the group to maintain credit metrics that are consistent with an A- rating through 2010.

Scottish Power's business and financial profiles have improved following its acquisition by Iberdrola, S&P said, and the company's ratings remain underpinned by solid cash flows from its regulated U.K. transmission and distribution operations and from its mostly hedged generation and retail activities.

These strengths are offset by a large capital-expenditure program focused on network investments and by exposure to price volatility in the U.K. power market, the agency said.

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