Moody's rates Viridian notes B2, loan Ba1

Moody's Investors Service said it assigned a definitive B2 (LGD4) rating to €600 million of senior secured notes due 2020 issued by Viridian Group FundCo II Ltd. and a definitive Ba1 (LGD1) rating to the new £225 million super senior revolving credit facility borrowed by Viridian Group Ltd. The outlook is stable.

The proceeds of the notes were used to redeem the £320 million of outstanding senior secured notes due April 2017 and to repay a portion of the subordinated shareholder loan provided by parent company Viridian Group Holdings Ltd. In turn, the proceeds from the partial repayment of the shareholder loan were used to extinguish part of the junior debt obligations of Viridian Group Holdings.

The agency said Viridian's B1 corporate family rating positively reflects the group's earnings diversity across its businesses, including capacity payments for power generation assets, price-regulated electricity supply in Northern Ireland, unregulated energy supply and a portfolio of contracted wind farm output.

However, the company's credit profile is constrained by its high financial leverage, the expected significant short-term increase in (mainly debt-funded) capital expenditure to grow the portfolio of owned operational onshore wind assets, the uncertainty about the future profitability of its core businesses resulting from a potential re-design of the Irish Single Electricity Market, the limited owned assets supporting its market activities and concentration risk at the Huntstown site and the expected gradual decrease in the contribution to earnings from price-regulated businesses in Northern Ireland.

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