S&P lowers Viesgo Generacion view to stable

Standard & Poor’s said it revised the outlook on Viesgo Generacion SLU, formerly known as E.ON Generacion, to stable from positive.

The agency also said it affirmed the company’s B+ long-term corporate credit rating.

S&P also said it affirmed the B+ rating on the group’s senior secured debt, comprising a €275 million loan and a €40 million loan, which consists of a €20 million revolving credit facility and a €20 million guarantee facility.

The recovery rating remains at 3, reflecting 30% to 50% expected default recovery.

The outlook revision follows a sector review of European non-regulated utilities as a result of falling power prices since the beginning of 2016, S&P said.

The company’s potential for debt reduction is weaker than previously expected, which led to the outlook revision.

Although Spanish power prices are more correlated with weather conditions than with commodity prices compared to central Europe, S&P said it expects Viesgo Generacion’s EBITDA will decline markedly.

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