S&P assigns Alfa Desarrollo notes BBB-

S&P said it gave a preliminary BBB- rating to Alfa Desarrollo SpA’s up to $1.2 billion notes due 2051.

Alfa Desarrollo is a newly created company that will hold the assets acquired from Colbun Transmision, including 899 kilometers of transmission lines and 27 substations.

“Our analysis also incorporates the cash flows from the assets that the project is currently acquiring, namely Colbun Transmision, in Chile. We will convert the preliminary rating into final rating upon the completion of the security package of all assets involved in the transaction,” the agency said in a press release.

The outlook is stable. The outlook incorporates an expectation that Alfa Desarrollo will maintain high availability of the transmission lines without incurring penalties. “We forecast a minimum debt-service coverage ratio (DSCR) of 1.20x in 2023 and an average DSCR of 1.30x during the notes' term,” S&P said.

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