Fitch affirms British Energy

Fitch Ratings said it affirmed the BB rating of British Energy Holdings plc's amortizing bonds, guaranteed by the group's material operating subsidiaries. The issuer default ratings of British Energy Holdings and British Energy Group plc are affirmed at BB+.

The outlooks is stable.

The significant rise over the last two years in average sales price achieved per megawatt-hour has enabled the group to generate enough net income for cash balances to now exceed debt, Fitch said.

However, the company continues to have significant operational problems at its advanced gas-cooled reactor power stations. Unplanned losses for the year to March 2007 are likely to be the highest on record, the agency said, and although the company expects that the Hinkley Point and Hunterston reactors will be back in service soon, both plants will operate at only 70% of capacity for fiscal year 2008 at least, the agency said.

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