EU UTILITIES: Week in Review

Data from RTE showed France’s electricity share from fossil fuels fell to 5% in 2024.

• Spreads lagged the overall market marginally, averaging just under 2bp tighter on the week. FCCSER (-7) and MRDGF (-6) were the best performers.
• Orsted spreads (+10) were pressured as it took another asset impairment and faces a tough politicial environment and cost issues in the US. Both S&P and Fitch joined Moody’s on outlook negative with metrics stretched, but likely to improve this year. Farm downs will be important for the balance sheet from here.
• A2A brought the first green bond to meet the new EU “gold standard”. Demand was strong, bringing pricing 5bp inside our FV.
• Severn Trent results contained no surprises, with credit metrics little changed https://mni.marketnews.com/40PLGif.
• Ausgrid has been out with a mandated 8Y since Tuesday.

• Thames Water was downgraded two notches by Moody’s in response to the Ofwat final determination.