S&P affirms Itabo

S&P said it affirmed its BB- corporate credit and issue-level ratings on Empresa Generadora de Electricidad Itabo SA (Itabo).

The outlook remains stable.

The agency said the ratings on Itabo continue to reflect an expectation that despite its conservative credit metrics and adequate liquidity position, the company wouldn't be able to withstand a sovereign stress scenario.

As a result, the BB- ratings on the Dominican Republic continue to limit the ratings on Itabo, S&P said.

“This is because the country's electricity sector depends on subsidies from the government, and therefore, we believe that a sovereign default scenario could damage the company's cash flow generation,” the agency said in a news release.

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