OREANDA-NEWS. March 10, 2015. Energias de Portugal SA's (EDP) five-year Credit Default Swaps (CDS) have firmed 31% over the past month to price at the tightest levels observed since January 2010, according to Fitch Solutions in its latest case study.

The CDS tightening for EDP outperformed the 5% tightening observed for the broader European utilities sector over the same time period.

"Improving market sentiment for Portugal's largest utility company is likely attributed to strengthening economic conditions as well as the company's seemingly effective business model of geographic and business diversification," said Diana Allmendinger, Director, Fitch Solutions.

After consistently pricing in 'BB+' space for much of the past year, credit protection on EDP's debt is now pricing in investment grade space, in line with 'BBB-' levels.

Fitch Solutions case studies build on data from its CDS Pricing Service and proprietary quantitative models, including CDS Implied Ratings. These credit risk indicators are designed to provide real-time, market-based views of creditworthiness. As such, they can and often do reflect more short term market views on factors such as currencies, seasonal market effects and short-term technical influences. This is in contrast to Fitch Ratings' Issuer Default Ratings (IDRs), which are based on forward-looking fundamental credit analysis over an extended period of time.

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