TEXT-Fitch ups British Energy to 'A+';BEBF's unsecurd rtg droped

(The following statement was released by the ratings agency)

Feb 20 - Fitch Ratings has today upgraded British Energy Group's (BEG) and British Energy Bond Finance's (BEBF) Long-term Issuer Default Ratings (IDRs) to 'A+' from 'A-' (A minus) respectively. The rating action follows the prepayment on 10 February 2009 of BEBF's bonds at approximately GBP600m, which leaves BEG with no outstanding debt. The agency has upgraded BEBF's senior unsecured rating to 'A+' from 'A-' (A minus), removed it from Rating Watch Positive (RWP), and simultaneously withdrawn the rating. The Long-term IDRs have been removed from Rating Watch Positive (RWP) and a Stable Outlook has been assigned to both IDRs.

The equalisation of BEG and BEBF's Long-term IDRs with that of EDF SA (EDF.PA) ('A+'/Stable/'F1') reflects the application of Fitch's Parent and Subsidiary Methodology, which reveals strong strategic and operational ties between BEG and its ultimate parent, EDF SA. An example of this strong support is the fact that EDF SA channelled finance to BEBF for the bond pre-payment. Fitch understands that future BEG/BEBF funding will derive from BEG cash flow and that BEBF will not be a future issuer. The latter, combined with the bond prepayment, leaves the senior unsecured rating on BEBF redundant and hence the rating has been withdrawn.

Fitch will maintain the IDRs on BEG and BEBF for the foreseeable future. The Stable Outlook on the IDRs reflects that of BEG's parent EDF SA.