...Strong PPAs: Empresa Electrica Angamos S.A. (Angamos) is fully contracted, and its power purchase agreements (PPAs) have an average tenure of 15 years with a stable, fixed monthly capacity charge structure. The PPAs allow for the pass-through of variable costs, including fuel and nonfuel costs and certain changes in laws. Furthermore, the contracts have comprehensive force majeure terms that add to cash flow predictability, and Angamos' two largest counterparties possess investment-grade credit quality. Stable FCF Generation: As the company's PPAs were designed to generate fixed, stable payments, Angamos has been generating positive FCF since its first full year of operations in 2012, though this changed starting in 2014, when the company began paying dividends to the parent company. Fitch Ratings is projecting the company to average capex of USD8 million per year, stable 38%¡39% EBITDA margins through 2019 and long-term margins settling in the low-40% range. Incorporating dividend payments,...
