Fitch cuts Investment Energy

Fitch Ratings said it downgraded Investment Energy Resources Ltd.'s long-term foreign and local currency issuer default ratings to B from B+ and placed the ratings on rating watch negative.

“The downgrade reflects the challenging conditions in the operating environment in Honduras faced by IERL's subsidiaries in that country, caused mainly by the deterioration in the financial profile of its main counterpart the state-owned Empresa Nacional de Energia Electrica (ENEE). The latter led Participaciones Choluteca Dos, SA (Choluteca; IERL's subsidiary) to missed the payments on its subordinated debt, which is non-recourse to IERL,” said Fitch in a press release.

The RWN mirrors the uncertainty regarding ENEE's capability to keep paying its account payables in time and settle the back payments owed to private generators. The RWN also reflects Choluteca's current state of missed payments, which the company estimates to resolve in 2020, the agency said.

Fitch said it expects to resolve the negative rating watch once Choluteca clears the default on its subordinated debt.

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