Fitch rates Inkia reopening BB

Fitch Ratings said it assigned a BB rating to the re-opening of Inkia Energy Ltd.'s 5 7/8% senior unsecured bond due 2027.

The re-opening of up to $150 million is ultimately part of the financing for I Squared Capital's (ISC) acquisition of Inkia, expected to close at the end of the year.

Fitch said that historically, Inkia's elevated leverage, which reached 9.4x in 2016, has been tolerated in light of the agency’s clear expectation for the company's deleveraging trajectory.

Fitch believes that the negative near-term impact to Inkia's capital structure from the re-opening is offset by upsides related to ISC's participation including improved cash flow predictability and potential synergistic elements within ISC's Latin American energy portfolio.

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