Fitch rates EPM notes BBB

Fitch Ratings said it assigned a BBB rating to Empresas Publicas de Medellin ESP's (EPM) proposed senior notes issuance.

The rating is on negative watch, the agency noted.

The proceeds will be used from the proposed issuance will refinance existing debt, including funding the cash tender offer to repurchase the outstanding EPM's 8 3/8% senior notes due 2021, Fitch said.

If completed, this transaction will extend the company's debt maturity profile and strengthen its liquidity levels, the agency said.

Fitch said it currently rates EPM's long-term foreign- and local-currency issuer default ratings at B and BB respectively.

The ratings reflect continued uncertainty regarding the cause and consequences of a landslide that blocked EPM's auxiliary diversion system on April 28, 2018 and the final cost over-runs that will result from the premature flooding of the generation cavern, Fitch said.

Additional technical and infrastructure complications are possible, which could delay the project operational date beyond three years, the agency said.

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