OREANDA-NEWS. Fitch Ratings has affirmed Wales & West Utilities Limited's (WWU) and Wales & West Utilities Finance plc's (WWUF) class A senior secured ratings at 'A-' and class B senior secured ratings at 'BBB'. The Outlook is Stable.

The affirmation reflects WWU's continued solid operational and regulatory performance during RIIO-GD1 (financial years to March 2014 to 2021), with cost outperformance delivered according to plan. The company's credit profile continues to be supported by low business risk stemming from a favourable and transparent UK regulatory framework.

At the same time WWU's financial profile is constrained by index-linked hedging, which generates net cost rather than benefit. Fitch expects WWU's credit metrics for class A debt, in particular post maintenance interest cover ratio (PMICR), to remain stretched during GD1. At the same time we expect credit metrics for class B debt to remain comfortably within current ratings. An increase in net swap cost leading to weaker interest cover ratios remains a rating risk.