S&P rates Ashmore loans B+

Standard & Poor's said it assigned a B+ corporate credit rating to Ashmore Energy International and B+ ratings with recovery ratings of 3 to the company's $500 million first-lien revolving credit facility due 2012 and $1 billion first-lien term loan due in 2014.

The outlook is stable.

Ashmore will use the proceeds from the term loan to refinance the debt it incurred when it acquired its assets from Enron Corp., to provide for working capital purposes and for other general corporate purposes.

The agency said Ashmore's B+ corporate credit rating reflects the significant concentration of its assets in emerging markets; its reliance on distributions from investments in companies focused on the energy sector in jurisdictions with considerable regulatory and operating uncertainties and potential currency devaluation, including Bolivia and Venezuela; the largest asset in the portfolio, Elektro Eletricidade e Serviços SA, contributed 55% of the 2006 estimated distributions received by Ashmore; the low level of cash flow available after holding company debt obligations, operating costs and dividends; and the limited track record of the holding company.

The following strengths mitigate the above risks: a significant portion of the company's revenues come from regulated markets or contracts; the $500 million revolver provides funds for working capital needs, letters of credit or other guarantees to its subsidiaries, acquisition financing and other corporate purposes; and there are limited transactions between project subsidiaries, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.