S&P affirms Itabo

Standard & Poor's said it affirmed its B long-term corporate credit rating on Empresa Generadora de Electricidad Itabo SA and revised its outlook to negative from stable.

At the same time, the agency said it affirmed its B long-term rating on Itabo Finance SA's $125 million notes.

S&P added that the outlook revision reflects the company's weak financial performance, noting that this was due to higher-than-expected energy prices in the spot market and the uncertainty regarding the impact of increasing fuel prices.

The ratings on Itabo reflect the challenges of operating in the electric sector in the Dominican Republic, which is characterized by a highly subsidized distribution sector whose long-term operational and financial sustainability remains uncertain, S&P noted.

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