RWE Restores Credit Stability with Amprion Deal: Credit Video

RWE breached its 3x leverage ceiling in 2Q as Ebitda hit a likely trough, renewable spending remained elevated and it embarked on a share buyback program. Having already cut midterm spending plans by 25% and re-entered the hybrid market for the first time in decade, a more creative solution was required and RWE found it with a joint venture for its stake in Amprion that's expected to cut net debt by €2.6 billion in 2025. This provides scope for leverage to move back below the 3x ceiling in 2025 and stay there through 2027 as RWE delivers its renewable project construction program to spur earnings double-digit earnings growth. Paul Vickars, senior credit analyst at Bloomberg Intelligence, discusses the implications for credit quality and bond/hybrid spreads in this short video to accompany the new credit primer.