Fitch downgrades Enel debt

Fitch Ratings said it downgraded the senior debt of Enel SpA, Enel Investment Holding BV and Enel Finance International NV to A- from A and removed the ratings from Rating Watch negative. The agency also affirmed Enel's A- long-term issuer default rating with a stable outlook and its F2 short-term issuer default rating.

The rating actions follow the agency's downgrade of Italy's sovereign rating to A-/outlook negative from A+/Rating Watch negative. The company's debt rating is now aligned with its issuer default rating.

The one-notch uplift for higher recoveries that Fitch applies to regulated utility senior debt is no longer applied where a sovereign's rating falls below that of the utility's senior debt rating. Instead, in that case the senior debt rating is aligned with the utility's issuer default rating. The agency believes that the traditionally higher rates of recovery for utility senior debt are less predictable in a distressed sovereign environment than in the case of an idiosyncratic default of a single utility.

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