S&P lifts Origin Energy

S&P said it raised the issuer credit rating on Origin Energy Ltd. to BBB from BBB-, reflecting expectations that the company will operate within its target ratio of debt-to-EBITDA in the range of 2.5x to 3x.

The outlook is stable, reflecting the company's strong market position as one of the three largest integrated utilities in the country, the agency said.

Origin Energy has strengthened its balance sheet and improved its overall financial position, backed by various credit supportive measures it has taken over the past few years, S&P said.

The agency said it expects Origin to generate strong positive free operating cash flows, which should help offset potential negative pressures the industry faces, the agency said.

The upgrades reflect expectations that Origin will be able to operate with stronger financial metrics, particularly with a debt-to-EBITDA ratio in the range of 2.5x to 3x, commensurate with the current higher rating.

Origin's key strength continues to be its asset portfolio and strong market position in the electricity and gas retail markets, S&P said.

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