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S&P raises Verbund
S&P said it raised its long-term issuer credit and senior unsecured debt ratings on Verbund AG to A from A-.
“The upgrade is primarily the result of Verbund’s ongoing deleveraging supported by improved realized power prices and cost measures,” said the agency in a press release. The company’s debt reduction is “beyond expectations.”
S&P said it sees positively the company’s focus on business profile-supportive growth investments within regulated activities, with highly predictable returns, and an increasing regulated asset base at about 8% over the coming two years. The Austrian government’s renewable package could also support Verbund’s plans to increase its renewable capacity.
“We believe that there’s limited room for large-scale renewable capacity in the country, most notably for hydro capacity. Therefore, we expect most of the additional capacity will come from wind and solar parks paired with smaller hydro assets. We expect for the impact on Verbund’s capex program to remain within reasonable limits to support credit metrics for the rating due to absence of large-scale opportunities within Austria,” the agency said.
The outlook is stable.
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