Moody's upgraded Verbund AG's senior unsecured ratings to A3 from Baa1 with a stable outlook.

The rating agency said the upgrade reflects the Austrian utility's "consistently strengthening financial profile, mainly on the back of higher achieved power prices."

Verbund in September 2019 announced a 39% year-over-year increase in EBITDA for the reported period of nine months. This has translated into a reduction in leverage, with its funds from operations to net debt ratio exceeding 50% on 12-month basis.

Moody's believes that the company's financial metrics give it sufficient flexibility to expand in the renewable sector and invest in transmission infrastructure, while maintaining a strong profile.