S&P Cuts Edison International to BBB- as Wildfire Fund Falls Short

Overview

• S&P downgraded Edison International to BBB- with a negative outlook on September 17, pointing to reduced efficacy of California’s wildfire fund.
• Senate Bill 254’s $18 billion authorization equates to roughly $10.5 billion in net present value, according to S&P’s analysis.
• After financing Eaton Fire obligations, S&P estimates the fund will stand at about 70% to 75% of the original $21 billion, pressuring credit quality.
• S&P projects Edison’s FFO-to-debt could improve in 2025 on larger balancing-account collections, about $1.6 billion in securitization proceeds, and constructive regulatory outcomes.
• UBS kept a Buy rating and $66 target after a rate-case result delivering about 91% of requested rate base and 62% of sought revenue increases, noting prospects for a reiterated 6% EPS growth outlook and Woolsey-related recoveries.