Moody's assigns Baa3 ratings to EPM's proposed senior notes - Moody's Global Credit Research

Moody's assigns Baa3 ratings to EPM's proposed senior notes

Moody's assigns Baa3 ratings to EPM's proposed senior notes - Moody's Global Credit Research
Moody's assigns Baa3 ratings to EPM's proposed senior notes
Published Jul 07, 2020
6 pages (3081 words) — Published Jul 07, 2020
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...ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications. To the extent permitted by law, MOODY'S and its directors, officers,...

  
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Empresas Publicas de Medellin E.S.P
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Empresas Publicas de Medellin E.S.P: Update following rating affirmation, outlook changed to stable - Credit Opinion – 2022/03/14 – US$ 250.00 – ...Empresas Publicas de Medellin, E.S.P.'s (EPM, Baa3 stable) credit profile takes into consideration our Joint Default Analysis (JDA), with the City of Medellin (Baa2 negative) as the support provider. This results in a one-notch uplift from the company's ba1 Baseline Credit Assessment (BCA). EPM's ba1 BCA reflects its large scale, presence in several countries and diversified operations. The company's electricity distribution business makes the most significant contribution to its EBITDA, with a 43% share as of September 2021 followed by electricity generation with 33%, water and solid waste management 17%, transmission 4% and gas 3%. On the other hand, more than 80% of EPM's EBITDA is concentrated in Colombia, and we expect this concentration to increase once the Ituango hydroelectric project starts operations in 2022. The large share of hydro power generation exposes EPM business to seasonal rainfall and prolonged droughts that impact energy spot price and operating margins. Nonetheless,...

Moody's changes EPM's outlook to stable, affirms Baa3 ratings - Rating Action – 2022/03/07 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT...

Empresas Publicas de Medellin E.S.P: EPM announces cost overruns for Ituango, a credit negative - Issuer Comment – 2021/07/15 – US$ 200.00 – ...On 14 July, Empresas P·blicas de Medellin E.S.P. (EPM, Baa3 negative) announced an updated budget for the Hidroituango dam and hydroelectric project (Ituango) in Colombia (Baa2 negative) following the completion of studies in areas that were previously inaccessible because of flooding and collapsed tunnels, including the project's intake gates, water conduction tunnels and powerhouse. EPM said additional costs for Ituango amount to COP2.148 billion ($562 million), or 33% of the company's 2021 EBITDA, a credit negative. The extra costs will be spread over 2021-25, with 2022 accounting for the highest amount of around COP 1 billion, to install the turbines required to initiate operations as planned in July 2022. EPM expects to fund the additional costs by adjusting its investment plan over 2021-23, with internal cash and the proceeds from selling its stakes in UNE EPM Telecomunicaciones S.A. and Inversiones Telco S.A.S., expected in 2022....

Empresas Publicas de Medellin E.S.P.: Update to credit analysis - Credit Opinion – 2021/07/14 – US$ 250.00 – ...Empresas Publicas de Medellin, E.S.P.'s (EPM, Baa3 negative) credit profile takes into consideration our Joint Default Analysis (JDA) with the City of Medellin (Baa2 negative) as the support provider, which results in a one-notch uplift from the company's ba1 Baseline Credit Assessment (BCA). EPM's ba1 BCA reflects its large scale, presence in several countries and diversified operations, with the electricity distribution business being the most important EBITDA contributor, with a share of 40% in 2020. EPM has EBITDA concentration of more than 75% in Colombia, which we expect to increase with the start of operations at the Ituango hydro project. The uncertainties generated by the start of Ituango's operations and still potential additional costs are reflected in the negative outlook. Current and expected credit metrics are in line with the assigned BCA, with cash interest coverage around 4.0x in the 2020-22 period and cash flow from operations pre-working capital (CFO pre-W/C)/debt around...

Empresas Publicas de Medellin E.S.P: Claims against Ituango contractors and resignation of the board are credit negative - Issuer Comment – 2020/08/13 – US$ 200.00 – ...On 11 August, Empresas Publicas de Medellin E.S.P. (EPM, Baa3 negative) announced the filing with the civil courts of the Department of Antiochia, a request for an out-of-court conciliation process with the consortium responsible for the construction of the Ituango dam and their insurance providers. Through such process, EPM seeks to recover damages incurred on the 2018 Ituango dam incident for approximately $2.6 billion. In April 2018, falling rock and soil blocked a tunnel and disrupted the downstream flow of water from Colombia's (Baa2 stable) Cauca River through the Ituango dam. The company, together with advisors and suppliers, continues to work on safety measures and the advance of construction. The announcement is credit negative as it increases the risk of further delays and cost overruns to complete the Ituango dam, depending on how the consortium responds. That same day, EPM also announced the resignation of eight of its nine-member board of directors. The mayor of the City of...

Empresas Publicas de Medellin E.S.P: Acquisition of CaribeMar to increase leverage in the medium term - Issuer Comment – 2020/03/24 – US$ 200.00 – ...On Friday, 20 March, Empresas Publicas de Medellin E.S.P. (EPM, Baa3 negative) announced it won the auction to take control of the soon to be formed CaribeMar electricity distribution company, which will hold the right to operate in the northern departments of Bolivar, Cesar, Cordoba, and Sucre, in Colombia (Baa2 stable). The takeover increases the company's long term mandatory capital investments in the midst of looming uncertainties related to the emergency situation of its Ituango hydro plant, and is mildly negative to its credit profile. Despite EPM's significant experience and sector expertise, the concession area has a history of troubled operating metrics, including above average energy losses and delinquency ratios. The takeover of CaribeMar is supported by more favorable regulatory and fiscal conditions promoted by the government, including a special tariff regime which will allow EPM to engage in a more aggressive investment plan and promote substantial improvements in technical...

Empresas Publicas de Medellin E.S.P: Update to credit analysis - Credit Opinion – 2020/03/16 – US$ 250.00 – ...Empresas Publicas de Medellin, E.S.P.'s (EPM, Baa3 negative) credit profile reflects the company's large scale and consolidated revenue base diversified by sector. In the nine months ended September 2019, EBITDA generation from the company's regulated electricity distribution segment was the highest at 44%. The credit view recognizes several uncertainties that follow the emergency events at its Ituango hydro project (2,400 megawatts [MW]) started in April 2018. The credit view reflects our expectation that leverage, as measured by debt/EBITDA, will remain close to 4.0x over the next 12-18 months, with potential for improvement once Ituango becomes operational by year-end 2021....

Moody's affirms EPM's Baa3 ratings, outlook remains negative - Rating Action – 2020/03/10 – US$ 180.00 – ...ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications. To the extent permitted by law, MOODY'S and its directors, officers,...

Empresas Publicas de Medellin E.S.P: Insurance recognition and asset sale are credit positive - Issuer Comment – 2019/09/18 – US$ 200.00 – ...On 17 September, Empresas Publicas de Medellin S.A. E.S.P. (EPM, Baa3 negative) announced that it had received a notice of coverage from Mapfre Seguros Generales de Colombia S.A. (Mapfre Colombia) on its Builder's All Risk Insurance Policy related to the landslides, tunnel blockages, and subsequent events that began in April 2018 at its landmarket Ituango hydro project. The announcement is credit positive because it confirms that at least a portion of damages will be indemnified. The actual amounts to be received by the insurance company have yet to be determined, with the overall policy issued in the amount of $2.556 billion related to material damage to physical infrastructure and equipment. Receiving notification of coverage by the insurance company is a first step, with actual disbursements still dependent on the process that will quantify the actual amounts of damage, any deductibles, and potential exclusions. EPM estimates its overall expenses with damaged infrastructure and equipment...

Empresas Publicas de Medellin E.S.P.: Update to credit analysis - Credit Opinion – 2019/07/08 – US$ 250.00 – ...Empresas Publicas de Medellin, E.S.P.'s (EPM, Baa3 negative) credit profile reflects the company's large scale and consolidated revenue base diversified by sector. In 2018, EBITDA generation from the company's regulated electricity distribution segment was the highest at 41%. The credit view recognizes several uncertainties that follow the contingency events related to the Ituango hydro project (2,400 megawatts [MW]) started in April 2018. The overall damage assessment, final term of project completion and potential cost overruns still represent credit risks and are reflected in the negative outlook. The credit view assumes that EPM will be successful in its asset sales program in 2019, which, combined with revenue growth in its distribution and water businesses, will allow the company to maintain debt/EBITDA below 4.0x as of year-end 2020....

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MLA:
Moody's Global Credit Research. "Moody's assigns Baa3 ratings to EPM's proposed senior notes" Jul 07, 2020. Alacra Store. May 18, 2024. <http://www.alacrastore.com/moodys-credit-research/Moody-s-assigns-Baa3-ratings-to-EPM-s-proposed-senior-notes-PR_427438>
  
APA:
Moody's Global Credit Research. (). Moody's assigns Baa3 ratings to EPM's proposed senior notes Jul 07, 2020. New York, NY: Alacra Store. Retrieved May 18, 2024 from <http://www.alacrastore.com/moodys-credit-research/Moody-s-assigns-Baa3-ratings-to-EPM-s-proposed-senior-notes-PR_427438>
  
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