S&P affirms Algonquin Power

Standard & Poor's said it affirmed the SR-2 Canadian stability rating on Algonquin Power Income Fund and removed it from StabilityWatch with negative implications, where it was placed on Feb. 26 following its bid to acquire Clean Power Income Fund, which was ultimately unsuccessful.

The outlook is negative.

"The stability rating on APIF reflects the fund's strong sustainability and the moderately low variability of its cash flow generation," S&P stability analyst Ronald Charbon said in a written statement.

The fund's strong sustainability is supported by its portfolio of power-generating assets underpinned by long-term power purchase agreements with strong counterparties, according to S&P.

The negative outlook reflects increasing merchant exposure and debt levels, reliance on debt to fund working capital, a strong Canadian dollar and ongoing technical issues at the St. Leon facility, the agency said.

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