S&P puts Innergex Renewable on watch

S&P said it placed the BBB- issuer credit rating on Innergex Renewable Energy Inc. and its BB issue-level ratings on the company’s preferred shares on CreditWatch with negative implications.

“The CreditWatch placement reflects continuing amounts of heightened leverage at the holdco level. If Innergex does not take steps to reduce debt, we would lower the rating. We intend to resolve the CreditWatch in the next 90 days,” said S&P in a press release.

The company has been on an aggressive growth path and, since the beginning of 2018, has either acquired or developed 1.5 gigawatts of cumulative incremental capacity. While a considerable portion of these capacity additions have ultimately been financed with project-level debt, Innergex’s corporate debt includes the equity contributions from both previous transactions, as well as for projects that are in development or under construction.

The company sold its Icelandic asset this year and used the proceeds to reduce holdco debt; however, its debt levels are still elevated due to continued investments in newer projects, the agency said.

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