KBRA Commentary on Primary Tenant in Taurus 2019-1 FR DAC

According to news sources, the Republic of France has announced the nationalisation of energy utility company Électricité de France, S.A. (“EDF”), which together with subsidiary ENEDIS, is the primary tenant in Taurus 2019-1 FR DAC, a CMBS single loan transaction secured by the borrower’s interest in 160 properties, most of which are mixed-use assets with office and Local Technical Area (“LTA”) uses. As of the latest investment report dated 4 May 2022, the portfolio derived 97.2% of the total gross rental income (GRI) from EDF and ENEDIS, a subsidiary of EDF.

EDF (Euronext: EDF) is an electric utility company that is 84.0% owned by the French government. The company provides power to over 35.0 million customers throughout the European zone and is the dominate energy provider in France, with close to 80.0% of the electricity output in the country. ENEDIS is a wholly-owned, operationally-independent subsidiary of EDF. The company is an electricity network distributor and is responsible for managing most of the electricity distribution network in France. ENEDIS provides daily development, maintenance, and operation across the electricity network and has a physical presence throughout France.

Further details were reported this week on the French government’s intention to acquire the remaining outstanding shares of EDF, fully nationalising the company. KBRA expects that the proposed nationalisation of EDF is highly likely to be consummated. Should this occur, no rating actions are anticipated as it should strengthen the credit profile of both EDF and ENEDIS, which will have credit characteristics consistent with a high investment grade rating. The tenant’s credit profile will continue to be considered in our ongoing monitoring and future surveillance reviews.

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Related Publications

• Taurus 2019-1 FR DAC Pre-Sale Report
• European CMBS Rating Methodology
• Global Structured Finance Counterparty Methodology

• ESG Global Rating Methodology

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