Fitch drops RWE

Fitch Ratings said it downgraded RWE AG's long-term issuer default rating and senior unsecured rating to BBB+ from A- and the subordinated note rating to BBB- from BBB.

The short-term issuer default rating was affirmed at F2.

The outlook is stable.

Fitch said the downgrade reflects the structural pressures in the German power market, which reduce RWE's overall cash flow generation and, despite the €1 billion efficiency enhancement program and steady or improved conditions in other segments including positive arbitration outcome in its gas segment, increases Fitch-expected forecast leverage by around 0.4x over the next three to five years.

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