S&P ends developing watch on Energo-Pro

S&P said it affirmed its B+ rating on Energo-Pro (EPas), removed it from CreditWatch with developing implications where it was placed on Sept. 28 and revised the outlook to positive. The agency also affirmed the B+ rating on unsecured bonds not guaranteed by U.S. Development Finance Corp. including the recently issued bond.

On Oct. 26, EPas sold a $300 million 11% bond, due November 2028, to refinance its €300 million nine-month bridge loan. “The refinancing will reduce the pressure we currently view on EPas' liquidity,” S&P said in a statement.

The agency noted, “The recent issuance increases financial expenses and reduces headroom above the 20% threshold. We previously expected the external financing to amount to $310 million-320 million and to have an interest rate of about 8%-9%, leading to an increase of cash interest paid toward €70 million-€80 million, from €40 million-€50 million. However, we now forecast S&P Global Ratings-adjusted interest paid to increase to €80 million-€85 million following the issuance of a $300 million bond with an 11% coupon.”

The positive outlook indicates a possible rating upgrade if EPas integrates its recently acquired hydro assets while keeping FFO to debt at about 20% and its parent DK Holding Investment's FFO to debt stays well above 20%, S&P said.

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