Fitch affirms Gas Natural on acquisition news

Fitch Ratings said it affirmed Gas Natural SDG, SA’s long-term issuer default rating at BBB+ with a stable outlook following news of the company’s acquisition of Compania General de Electricidad SA for $3.3 billion.

The affirmation reflects a view that the acquisition will have a moderately positive impact on Gas Natural’s business profile due to increased geographical diversification, as well as an expectation of rapid de-leveraging following the acquisition, Fitch said.

The acquisition will temporarily weaken credit ratios to above the negative rating guideline in the next 12 months, the agency said, but it expect funds-from-operations adjusted net leverage to return to a level commensurate with the rating in 2016 to 2017.

The company’s short- term issuer default rating also was affirmed at F2, along with Gas Natural Fenosa Finance BV’s senior unsecured rating at BBB+ and Gas Natural Capital Markets, SA’s senior unsecured rating at BBB+.

Also affirmed includes Union Fenosa Financial Services USA LLC’s subordinated debt rating at BB+ and Union Fenosa Preferentes, SA’s subordinated debt rating at BB.

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