S&P cuts Peru LNG

S&P said it downgraded Peru LNG Srl to B- from B.

“Our ratings reflect PLNG's very high leverage, subdued cash flow generation, and what we now see as a more gradual deleveraging path well into 2022. Although our revised base case incorporates the recovery of natural gas prices from record-low levels in 2020, the recovery pace now results in a more gradual deleveraging than we originally forecasted,” S&P said in a press release.

The agency now forecasts EBITDA of $45 million-$50 million in 2020 versus $80 million-$90 million in its previous base case and about $100 million in 2021.

“This would lead to debt to EBITDA close to 18x in 2020 (compared to 9x-10x in our previous forecast), recovering to about 8.5x in 2021 and 6x in 2022. This deleveraging path is slower than the one resulting from our previous forecast of near 7.5x in 2021,” S&P said.

The outlook is negative.

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