Fitch: North West Electricity view negative

Fitch Ratings said it affirmed North West Electricity Networks plc's long-term issuer default rating at BBB and revised the outlook to negative from stable.

The agency also affirmed Electricity North West Ltd.’s long-term issuer default rating at BBB+ with a stable outlook, senior unsecured rating at A- and short-term issuer default rating at F2.

Electricity North West’s BBB+ rating reflects tougher electricity distribution regulation from April, partly offset by expected incentive revenues and totex outperformance over RIIO-ED-1. Estimated average credit metrics are within the rating guidelines for Electricity North West, but not for North West Electricity, which also has limited gearing headroom.

This is reflected in the revision of the outlook to negative.

However, North West Electricity is looking at a range of remedial measures to improve post-maintenance interest coverage ratio. Assuming one or more of these measures brought the post-maintenance interest coverage ratio back within rating guidelines, Fitch said it would expect to revise the outlook back to stable.

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