...July 9, 2020 MELBOURNE (S&P Global Ratings) July 10, 2020--S&P Global Ratings said today that the decision by New Zealand Aluminum Smelter (NZAS) to cease operations in New Zealand from Aug. 31, 2021, will lower energy margins for the country's utilities for a few years as energy demand from the smelter unwinds. However, the smelter closure does not have an immediate effect on the ratings on Mercury NZ Ltd. (###+/Stable/A-2) and Genesis Energy Ltd. (###+/Stable/A-2). We expect Genesis and Mercury to weather this risk due to their asset portfolios and location, as well as financial headroom in the case of Mercury. The ongoing fallout from COVID-19 and softer demand conditions may require Genesis to closely manage its balance sheet and shareholder expectations because we expect the company to track close to our downgrade threshold of debt to EBITDA of about 3x. The NZAS decision will affect all of New Zealand's electricity generators or retailers to varying degrees at least over the next...
