S&P cuts Endesa

Standard & Poor's said that it lowered the long-term corporate credit and senior debt ratings on Endesa SA to BBB+ from A- and removed them from CreditWatch, where they were placed with negative implications on Dec. 10.

S&P also affirmed the A-2 short-term corporate credit rating and the BBB- rating on Endesa's subordinated preferred stock.

The outlook is stable.

The downgrade follows S&P's assessment that the Iberian subsidiary of Enel SpA, which has operations principally in Spain and Latin America, does not fulfill a public policy role for the Italian government and does not benefit from any direct link with the government itself, the agency said.

The ratings on Endesa continue to reflect the company's solid position as one of Spain's largest vertically integrated electricity utilities with well-matched generation and supply businesses, control of Chile's largest electricity group and reduced planned capital expenditures, the agency added.

The ratings also consider the effect on demand of depressed economic conditions in Spain, the risk related to regulatory uncertainty in the Spanish energy sector and exposure to Latin America, S&P said.

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