S&P lifts Empresa Generadora de Electricidad

Standard & Poor's said it raised its rating on Empresa Generadora de Electricidad Haina SA to B from B-. The outlook remains stable.

"The rating action reflects improvement in the company's operating and financial risk profiles, because it has diversified its customer base and energy sources," said S&P credit analyst Monica Ponce in a news release.

The agency said its ratings on EGE Haina and its special-purpose financing entity, Haina Finance SA, consider the challenges of operating in the Dominican Republic's electric power industry, its weak regulatory framework and an inefficient and highly subsidized distribution sector with uncertain long-term operational and financial sustainability.

In particular, the cash flows of energy generating companies are susceptible to weak collection rates and payment delays from the distribution companies. The rating also considers the power sector's dependence on the sovereign's ability to keep subsidizing the sector and the economy, which may be affected in an economic stress scenario.

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