Moody's upgrades AES El Salvador Trust

Moody's Investors Service said it upgraded the corporate family rating and senior unsecured rating of AES El Salvador Trust II to B2 from B3.

The outlook remains stable.

The upgrades reflect the recent upgrade on the ratings of the government of El Salvador to B3 from Caa1.

The trust issued 6¾% $310 million bullet notes due in 2023 for the benefit of four electricity distribution affiliates in El Salvador, Moody's said.

The ratings also factor in the robust consolidated credit metrics for the B-rating category, the regulated nature and relatively low business risk profile of their operations, the agency said, as well as an opinion that the regulatory framework is overall credit supportive.

This view considers the credit constructive outcome of the 2018 to 2022 tariff review that allow the guarantors to earn a 10% annual return on the regulated distribution assets based on their replacement cost before taxes, Moody's said.

The ratings also consider that the guarantors face no foreign-exchange risk exposure and a leading position in El Salvadorian electricity distribution sector but take into consideration their modest size, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.