Moody’s turns Electrica Cochrane view to negative

Moody’s Investors Service said it changed Empresa Electrica Cochrane SpA’s outlook to negative from stable and affirmed its Ba1 senior secured rating.

The release of the corporate guarantee and bank letter of credit supporting the Sierra Gorda SCM’s obligations under power purchase agreement as the largest project offtaker, accounting for about 45% of Cochrane’ expected revenues in 2021, prompted the rating action, Moody’s said.

“The negative outlook on Cochrane is driven by the weakening of the company’s offtaker risk profile following the recent release of the Sierra Gorda shareholder’s financial support,” said Natividad Martel, a Moody’s vice president and senior analyst, in a press release.

“The negative outlook also considers Moody’s changed view that Sierra Gorda is no longer a strategic asset for its Japanese shareholders, SMM and Sumitomo, following the announcement in October 2020 that it plans to sell its 45% minority interest in Sierra Gorda,” added Martel.

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