Fitch lifts Viridian notes to BB-/RR3

Fitch Ratings said it upgraded Viridian Group Fundco II Ltd.’s senior secured notes to BB-/RR3 from B+/RR4.

The agency affirmed Viridian Group Investments Ltd.’s issuer default rating at B+ with a stable outlook, along with Viridian Group Ltd.’s senior secured rating and Viridian Power and Energy Holdings Ltd.’s super senior revolving credit facility at BB+/RR1.

Fitch said the B+ rating reflects near completion of the wind capacity build with a meaningful increase in expected dividends paid to the restricted group and free cash flow from the financial year ending in March 2019 (FY19).

“Fitch-estimated regulated and quasi-regulated EBITDA of 70% largely offsets commodity price risk and the impact of Integrated Single Electricity Market (ISEM) from May 2018,” the agency said in a news release.

“However, the lower level of wholesale prices takes estimated FFO adjusted net leverage higher to around 4.5x in FY19 and FY20 before recovering again in FY21. These figures compare with FFO adjusted net leverage in FY17 of 4.0x.”

“Likewise we only expect coverage ratios to recover on stronger wholesale pricing from FY21.”

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