S&P: Itabo view stable

Standard & Poor's said it affirmed the B long-term corporate credit rating on Empresa Generadora de Electricidad Itabo SA and revised the outlook to stable from negative. The B long-term rating on Itabo Finance SA's $125 million notes was affirmed.

The outlook revision reflects the return of Itabo's credit measures to levels appropriate for the rating as a result of higher sales stemming from the increase in demand from distribution companies, the agency said.

"Our ratings on Itabo reflect the challenges of operating in the Dominican Republic's electric industry, which is highly subsidized and whose long-term operational and financial sustainability remains uncertain," S&P analyst Marcela Duenas said in a statement.

The rating also incorporates Itabo's high risk in dealing with off-takers, the agency said, demonstrated by Dominican distribution companies' failure to fully meet their payment obligations to the electric-generating companies during the country's latest economic crisis.

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