S&P revises Singapore Power to positive

S&P said it revised the outlook for Singapore Power Ltd. and its subsidiary SP PowerAssets Ltd. to positive from stable.

“The positive outlook on SingPower reflects the possibility we may raise the rating over the next six-12 months if the next regulatory tariff outcome is in line with our expectations such that SingPower’s FFO to debt remains at 30%-35% on a sustained basis. The positive outlook on SPPA reflects the outlook on its parent, SingPower,” said S&P in a press release.

Even though lower regulatory returns are highly probable, which mirrors prevailing low risk-free rates, and the uncertainty in relation to the final approved regulated returns from April 2020, S&P said it estimates SingPower’s FFO-to-debt ratio is likely to stay above its upside rating trigger of 25%.

S&P also affirmed SingPower’s AA rating and the AA rating on SP Power’s unsecured notes.

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