S&P downgrades Guacolda to BB

S&P said it lowered the long-term corporate credit and issue-level ratings on Guacolda Energia SA to BB from BB+.

The outlook is stable.

S&P said the action incorporates its view that Guacolda's deleveraging will take longer than expected, particularly considering certain events outside the company's control such as the recent stoppage in one of its units and potential delays in the operational startup of transmission lines as well as higher–than-expected dividend payments for coming years.

This is despite the company recently recontracting with industrial customers for around 1,200 GWh that would help reduce the volatility on its margins.

S&P said it now anticipates net debt to EBITDA of 4.5 times to 5 times in 2017 and 4 times in 2018, compared with the previous expectations of 3.5 times and 3 times, respectively.

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