OREANDA-NEWS. Fitch Ratings has affirmed Iberdrola Finanzas, S.A.U.'s (Iberdrola Finanzas) senior unsecured rating at 'BBB+' and national senior unsecured rating at 'AAA(mex)'. The affirmation includes the Mexican certificates IBDROLA 08.

KEY RATING DRIVERS
Iberdrola Finanzas' senior unsecured ratings are based on the unconditional and irrevocable guarantee by its main shareholder, Iberdrola, SA (Iberdrola; BBB+/Stable). As a result, Iberdrola Finanzas's senior unsecured rating of 'BBB+' is aligned with that of Iberdrola.

Fitch affirmed Iberdrola on 6 November 2014, reflecting our view of a stabilised regulatory framework in Spain and the so far successful execution of Iberdrola's business plan (2014-2016). The business plan included the completion of the EUR2bn disposal plan and the allocation of new investments in regulated/quasi-regulated assets with pre-determined returns in the UK, US and Mexico. Fitch forecasts that Iberdrola's credit metrics will remain within the rating guidelines in 2015-2016.

RATING SENSITIVITIES FOR IBERDROLA
Positive: Future developments that could lead to positive rating action include:
- Outperformance on our expectations with capital structure targets supporting FFO adjusted net leverage substantially below 3.5x and FFO interest coverage above 5.0x on a sustained basis.

Negative: Future developments that could lead to negative rating action include:
- Underperformance on our expectations with an increase of FFO adjusted net leverage up to and above 4.5x and FFO interest coverage below 4.0x on a sustained basis.
- Deterioration of the operating environment or further government or regulatory measures in the key areas of operation substantially reducing cash flows.