Moody's upgrades Enel Americas’ outlook rating from 'stable’ to ‘positive’

Published on Monday, 23 December 2019

  • Leverage has fallen from a debt-to-Ebitda ratio of 3.2 in late 2018 to 1.9 this past September.


(El Mercurio Inversiones) Moody's Investors Service decided to upgrade the outlook assigned to the Enel Americas Baa3 rating from ‘stable’ to ‘positive.’

"The change in outlook and affirmation of the rating reflect an expected improvement in operations and the generation of cash flow leading to continuous deleveraging, already assisted by US$3 billion capital increase finalized in September 2019 and the subsequent prepayment of nearly US$ 2.5 billion in debt," affirms the agency in its rating report, according to Valor Futuro.

Moody's has reported that the leverage ratio, calculated as adjusted debt to EBITDA, has dropped from 3.2 in December 2018 to 1.9 in September 2019.

We expect further deleveraging and a continuous improvement in the company's operations and cash flow, such that the adjusted debt-to-EBITDA ratio will reach 1.5 by 2022,”

"The low leverage ratio, along with geographical and sectoral diversification, reduces the effects of Enel Américas greater presence in Brazil, which will represent 50% of the consolidated generation of EBITDA for 2022,” it adds.

In this line, Moody's expects Enel Américas "to continue maintaining conservative financial profile as it pursues its considerable plan to expand by US$ 5.3 billion between 2020 and 2022, as per its recently published strategic plan, 62% of which will be assigned to Brazil.”

The company has shown a positive track record of improving the operational and financial performance of utilities distribution services after acquisitions, and 82% of capital expenses will support organic growth in this segment, increasing its consolidated base of regulated assets, which will consequently lead to efficiency gains,” it points out.

Ultimately, Moody’s says that the positive perspective “also considers our expectation that the total adjusted debt will continue to fall after the planned reduction in unhedged liability pensions in Eletropaulo," one of management's goals following the capital increase performed.