Moody’s rates Energuate CFR, notes Ba2

Moody's Investors Service said it assigned a Ba2 corporate family rating and senior unsecured rating to the proposed issuance of up to $350 million senior unsecured notes by Energuate Trust.

The outlook is stable.

Energuate will largely use the proceeds to repay outstanding local debt (nearly $310 million). In addition, Energuate will make cash distributions to the shareholders of Distribuidora de Electricidad de Occidente, SA (Deocsa) and Distribuidora de Electricidad de Oriente, SA (Deorsa) in the form of dividends ($57 million) and capital reductions ($73 million). To that end, Energuate will complement the proceeds from the notes with financing raised through a local bank on April 7 for total of up to 1.14 billion Guatemalan Quetzal (equal to about $155 million). Thus, after completion of the transaction the utilities' total debt obligations will aggregate $450 million.

"The Ba2 ratings largely reflect the utilities' credit quality because of the structure of the transaction," Moody’s vice president, senior analyst Natividad Martel said in a news release.

"The Ba2 ratings reflect the fully regulated nature of the utilities' operations. They also capture the overall credit supportiveness of the regulatory environment in Guatemala (Ba1 stable)."

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