Fitch upgrades Fenix Power

Fitch Ratings said it upgraded Fenix Power Peru SA's long-term issuer default rating to BBB- from BB and removed the ratings from negative watch.

The outlook is stable.

This action affects Fenix's $340 million senior unsecured notes due 2027.

The upgrades reflect the material strengthening of support from the company's parents, resulting from Colbun's announced commitment to bolster liquidity during material cash flow headwinds, Fitch said.

Fenix's shareholders provided the company a three-year cash support agreement of up to $101 million with support from Blue Bolt A 2015 Ltd., a wholly owned subsidiary of Abu-Dhabi Investment Authority and Sigma Asset Management, the agency said.

The ratings are one notch lower than those of its controlling shareholder, Fitch said.

The agency said it does not expect cash flow generation to improve in the short term after the company's cash flow missed expectations for two consecutive years.

Absent material electricity demand growth in Peru from regulated customers or higher spot prices, Fitch said Fenix's cash flow generation will continue under pressure as the company redirects generation to the spot market.

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