Moody's affirms EPM, EEGSA

Moody's Investors Service said it affirmed Empresas Publicas de Medellin, ESP's Baa3 local-currency issuer rating and the Baa3 foreign-currency rating of its outstanding $500 million senior notes. The outlook remains stable.

Moody's also affirmed the Ba3 corporate family rating and senior rating of Empresa Electrica de Guatemala, SA. The outlook remains negative.

The affirmations follow the announcement that EPM acquired all of Distribucion Electrica Centro Americana II SA and GESA, Moody's said.

Moody's expects EPM's aggressive Mega 2015 expansion strategy to increase the size of the group and its revenue base. However, expansion is likely to be accompanied by an increase in leverage and an associated deterioration in its strong historical credit metrics, the agency said.

Moody's affirmed EEGSA's Ba3 rating outlook, reflecting uncertainties associated with the change in ownership, including changes to the capital structure and to dividend policy. The rating affirmation also factors in the challenging regulatory environment in Guatemala.

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