S&P rates Energo-Pro notes B+

S&P said it assigned a B+ long-term issue rating to the proposed dollar-denominated notes to be issued by Energo-Pro AS (B+/stable).

“We think the proposed issuance will improve EPas' debt maturity profile since the proceeds will mostly be used to refinance existing debt, notably the notes due in December 2022,” the agency said in a news release.

“At the same time, we think it might mean higher finance expenses, which will be reflected in the company's funds from operations (FFO) from 2022.”

However, the agency noted that the company’s 2021 results were moderately better than previous assumptions on the back of supportive electricity prices and developments in electricity distribution segment regulation in Georgia, with expected 2021 EBITDA of €180 million-€190 million (€152 million in the first nine months of 2021).

“Based on this, we expect FFO to debt of about 20% in 2021 and 15%-20% in 2022 and the longer term (because we anticipate some moderation in electricity prices), which is commensurate with the B+ rating,” the agency said.

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