Moody's downgrades IEnova

Moody’s Investors Service said it downgraded Infraestructura Energetica Nova SAB de CV's (IEnova) debt ratings to Baa3 (global scale, local currency) from Baa2 and to Aa3.mx (Mexico national scale) from Aa2.mx. The agency changed the outlook to stable from negative.

"IEnova's downgrade reflects weak financial metrics, which have been consistently below our Baa2 downgrade threshold for the last two years and are expected to remain below that threshold at least through 2022" said Roxana Munoz, a Moody’s associate vice president and analyst, in a press release.

"We see IEnova's ratio of funds from operations to debt hovering in the 11-13% range, which is more appropriate for the Baa3 rating category, given IEnova's current risk profile," Munoz added.

The outlook considers that credit metrics will stay relatively stable in the next two to three years despite IEnova's plans to continue building and operating new energy infrastructure projects in Mexico, such as ECA, which could be funded through additional debt, the agency said.

Moody's said it expects FFO to debt to remain in the 12-13% range and an interest coverage ratio above 3x until 2023.

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