A.I. Candelaria Spain's Senior Secured Notes Affirmed At 'BB-' On $50 Million Add-On

SAO PAULO (S&P Global Ratings) Aug. 6, 2020--S&P Global Ratings affirmed its 'BB-' issue rating on A.I. Candelaria Spain's (Candelaria) senior secured notes after the company announced a $50 million add-on to the existing notes. As a result, the total debt outstanding increases to $750 million from $700 million. Candelaria will mainly use the proceeds to upstream extraordinary dividends to its shareholders. Although the transaction doesn't immediately affect the rating, the updated interest coverage ratio would be only marginally above the 3x level that constitutes the threshold for a downgrade under our criteria. Still, considering that 2021 is the weakest year in our base case and that in 2022 we expect a gradual improvement over main credit metrics as the

...August 6, 2020 SAO PAULO (S&P Global Ratings) Aug. 6, 2020--S&P Global Ratings affirmed its '##-' issue rating on A.I. Candelaria Spain's (Candelaria) senior secured notes after the company announced a $50 million add-on to the existing notes. As a result, the total debt outstanding increases to $750 million from $700 million. Candelaria will mainly use the proceeds to upstream extraordinary dividends to its shareholders. Although the transaction doesn't immediately affect the rating, the updated interest coverage ratio would be only marginally above the 3x level that constitutes the threshold for a downgrade under our criteria. Still, considering that 2021 is the weakest year in our base case and that in 2022 we expect a gradual improvement over main credit metrics as the notes start to amortize, we're affirming the '##-' rating on the notes. In our base case, we expect dividends at Candelaria's level of about $176 million in 2020, between $160 million and $165 million in 2021, and between...

Ratings Action