Risk classification agency Fitch Ratings has upgraded its assessment of Enel Américas, based on the company’s “strong track record of delivery on its objectives, its strong diversified and geographic footprint in South America, conservative leverage profile, strong relationship with parent Enel S.p.A (Enel Group, A-/Stable) and its focus on innovation and sustainability in the utilities sector in South America”.
The upgrade from BBB+ to A- comes even though the company is exposed to “several economic challenges facing the region”, particularly in Brazil and Argentina.
Fitch reports that “this risk is adequately mitigated by the countries’ EBITDA generated by investment-grade countries (Colombia and Peru).” It adds that the company’s outlook is stable, given its “adequate liquidity profile” and “the expectation that a balanced mix between generation and distributions businesses will be maintained.”
Fitch expects that Enel Americas will “aggressively pursue investment opportunities to further strengthen its market position in Colombia, Brazil and Peru.” It adds that investment plans dynamics require additional significant indebtedness given the company’s solid FCF generation”.
Finally, the agency notes that Enel Américas’ credit rating is higher than its Latin American peer Enel Generación Chile (BBB +) and its key competition, Engie Energia Chile (BBB), Colbun (BBB), and AES Gener (BBB-) as a result of the its strong relationship to parent company Enel.
Check the Fitch Ratings Report here: https://www.fitchratings.com/site/pr/10088678
Read the article in El Mercurio Inversiones here: http://www.elmercurio.com/Inversiones/Noticias/Analisis/2019/09/09/Fitch-Ratings-sube-nota-de-riesgo-de-Enel-Americas-a-A-desde-BBB.aspx
Source: El Mercurio Inversiones