S&P rates Orazul Energy BB

S&P said it assigned its BB corporate credit and issue-level ratings to Orazul Energy Peru.

The outlook is negative.

At the same time, the agency withdrew the BB corporate credit rating on Orazul Energy Egenor S. en C. por A. (Egenor).

“As we expected, Orazul merged by absorption with its main subsidiary Egenor in August 2017 and assumed its rated $550 million outstanding bond,” S&P said in a news release.

“From an analytical perspective, the transaction doesn't have an impact on Orazul's repayment capacity because its underlying assets and liabilities remain the same.

“However, the negative outlook assigned to Orazul incorporates our view of the company's deteriorating profitability because of an extended period of low electricity spot prices, which could result in recontracting its capacity at lower prices.”

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