Moody's boosts Enel Americas

Moody's Investors Service said it boosted Enel Americas SA's senior unsecured ratings to Baa2 from Baa3 and changed the outlook to stable from positive.

“The rating upgrade reflects our expectation of improved operations and cash flow generation leading to continued strong credit metrics as the company continues expanding its activities and footprint in Latin America. The company's business strategy is increasingly focusing on the decarbonization of its energy mix, mainly through the expansion in the renewable space, as evidenced by the merge of EA with Enel Green Power (EGP, effective April 1, 2021). Importantly, its sizeable expansion plan ($7,8 billion in the next three years) will be developed mostly with internal generated cash flows and without increasing leverage,” the agency noted.

“The rating and stable outlook also recognize EA's strategic importance to its majority shareholder, ENEL SpA (Baa1 stable), and the potential for some level of support in case of financial distress. Evidence of support has been demonstrated for example when the parent provided intercompany loans to finance its subsidiary strategic acquisitions,” Moody’s said.

The outlook considers a forecast that EA will maintain its current leverage around 2x while it pursues its growth strategy without racking up significant debt and holding company debt remains in the range of 10%. “The stable outlook anticipates a ratio of CFO (pre- WC) to adjusted net debt in the 30-35% range and RFC to adjusted net debt in the 20-25% range,” the agency said.

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