Moody’s gives EDF notes Baa3

Moody's Investors Service said it assigned a Baa3 long-term rating to the reset perpetual subordinated notes to be issued by Electricité de France (EDF).

The outlook is stable.

The rating assigned to the hybrid is one notch lower than EDF's baa2 standalone baseline credit assessment and three notches lower than EDF's A3 senior unsecured rating, reflecting the features of the hybrid, Moody’s said.

The A3 senior unsecured rating benefits from two notches of uplift based on expectations for potential extraordinary support from the French state (Aa2), the agency said.

The difference in ratings takes into account a view that in a distressed scenario, support from the French state could entail distinctions between deeply subordinated notes and senior unsecured bonds, Moody’s explained.

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