S&P lowers Engie, debt

Standard & Poor's said it lowered its long- and short-term corporate credit ratings on Engie SA and its subsidiary GIE Suez Alliance to A- and A-2, respectively, from A and A-1.

The outlook on both companies is negative.

At the same time, the agency lowered its issue rating on Engie’s deeply subordinated hybrid securities to BBB from BBB+.

All ratings were removed from CreditWatch, where they were placed with negative implications on Feb. 26.

S&P said the actions reflect its view that Engie’s exposure to European power markets and upstream activities will weigh on its cash flow metrics, which will therefore not improve as anticipated.

The agency believes the recent marked deterioration in fuel commodities prices and European energy prices will slow Engie’s earnings growth in 2016 and even more in 2017 and 2018. This is despite the group's solid market positions and high degree of geographic and business diversification.

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