Fitch puts Orazul on positive watch

Fitch Ratings said it placed Orazul Energy Peru’s long-term foreign currency and local currency issuer default ratings of BB on rating watch positive from a stable outlook. The positive watch also applies to Orazul’s $550 million of senior unsecured notes.

“The rating watch positive reflects Fitch’s expectations that management will execute on liability management by early amortizing the senior unsecured notes in 1Q21, with proceeds of the sale of transmission businesses Etenorte SRL and Eteselva SRL by the end of 2020. This strategy will materially deleverage the company’s capital structure, measured as total debt to EBITDA, to below 4.5x in 2021 and 4x thereafter from 6.4x in 2019 absent additional debt incurrence,” Fitch said in a press release.

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