Moody’s might cut ScottishPower

Moody's Investors Service said it placed on review for downgrade the Baa1 issuer rating of ScottishPower Generation Ltd.

At the same time, the agency affirmed the ratings of Scottish Power Ltd. and its other subsidiaries with a stable outlook.

Moody’s said the action follows the announcement by Scottish Power's ultimate parent company, Iberdrola SA (Baa1 stable), that it had agreed to sell 100% of the share capital in ScottishPower Generation to Drax Group plc for £702 million.

The agency said the review for downgrade reflects an expectation that, upon closing of the transaction, the credit profile of ScottishPower Generation’s new shareholder Drax, will likely act as a cap on ScottishPower Generation’s rating.

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