S&P puts EPas on developing watch

S&P said it placed its B+ issuer rating for Energo-Pro as (EPas) on CreditWatch with developing implications and affirmed the B+ ratings on its senior unsecured bonds.

On Wednesday, the issuer reported it bought Western European-based hydro power plants. “S&P Global Ratings expects the acquisition to add about €60 million-€70 million to EPas' EBITDA, offsetting the expected reduction in Georgian and Bulgarian EBITDA. To finance the acquisition, EPas contracted a €300 million nine-month revolving bridge loan, which we expect will be refinanced with a senior unsecured bond,” the agency said in a press release.

S&P said it views the purchase as “as neutral to positive for EPas' credit standing.”

“The developing CreditWatch indicates on one hand the increasing liquidity pressure, given the €300 million new bridge loan that will need to be refinanced in difficult market conditions. On the other hand, we see the acquisition as marginally positive for EPas' credit standing, since it would enlarge the scope of operations and since we expect adjusted FFO to debt will remain above the 20% threshold for rating upside,” the agency explained.

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