Moody`s reviewing UK RECs for rating drop

Moody`s Investors Service has announced that all long-term debt ratings of the UK regional electricity-distribution companies (RECs) have been placed on review for possible downgrade. Credit pressure is continuing to build in the REC sector due to regulatory issues, changes of ownership and takeovers, defensive restructuring measures, the expected National Grid Co. merger and threat of retrospective taxation.

Moody`s stated that these pressures together threaten substantial weakening of the current credit quality of the sector. Moody`s has taken a negative outlook on the REC long-term debt ratings since May 1995.