European Utilities remain at a critical juncture between strategic transition and regulatory adaptation in 2025. This report explores how credit performance has evolved year-to-date, with Integrated Utilities leading spread tightening, while Regulated and Green sub-sectors lag. Against the backdrop of earnings normalisation following years of exceptional gains, many integrated players are actively shifting toward regulated network models ahead of upcoming framework revisions. BBVA EUR Credit Desk Strategy provides updated single-name recommendations following Q1 results and the April spread recovery, alongside a granular view of issuance trends, hybrid dynamics, and the implications of Europe’s evolving regulatory landscape—including potential shifts for Redeia, Spanish Gas DSOs, and exposure to U.S. renewable policy rollbacks.
EUR Utilities Credit Performance (slides 3-6)
Integrated Seniors Lead YtD25 Tightening; Regulated/Green Lag, Hybrids Inline with Non-Cyclicals; High Beta Sectors Outperforms in Post-Wides Retracement
BBVA: Updated Single-Name Recommendations (slides 7-9)
Recommendations on EUR Utilities Following 1Q25 Results and April Spread Recovery
EUR Utilities: Credit Outlook (slides 10-19)
Bond Spread Retracement from YtD25 Wides
Fundamentals & Issuance: Softer Near-Term Credit Outlook Amid Earnings Normalisation… but Integrated Players Pivot Toward Regulated Models Ahead of Policy Revisions
EUR Utilities – Key Credit Themes (slides 20-25)
Renewable U.S. Tax Credit Rollback
Southern European Regulated Utilities: Framework Revisions
Redeia Spotlight
Spanish Gas DSOs: Navigating Regulatory Resets and Capex Efficiency Targets
BBVA Single-Name Fundamental Views: Integrated, Regulated, Renewables, Water & Waste Utilities (slides 26-60)
Integrated Utilities
Regulated Utilities
Renewables
Water & Waste
Corporate Hybrids: EUR Utilities (slides 61-64)