Bulletin: Securitization Of Receivables Will Support CESP-Companhia Energetica de Sao Paulo's Credit Metrics

This report does not constitute a rating action. SAO PAULO (S&P Global Ratings) Jun. 19, 2023--S&P Global Ratings said today that CESP-Companhia Energetica de Sao Paulo's (CESP; BB-/Positive/--) decision to advance receivables related to indemnities totaling approximately R$4.2 billion will support the company?s credit metrics. We expect CESP and its parent company, Auren Energia S.A., to use the majority of the proceeds to finance their investment plan. We had already incorporated this into our base-case scenario, which translates into debt to EBITDA of 3.5x-4.0x and funds from operations (FFO) to debt of 15%-20% this year. From 2024 onward, we expect the company?s credit metrics will improve, with debt to EBITDA of about 3.0x-3.5x and FFO to debt of 20%-25%, following

...June 19, 2023 This report does not constitute a rating action. SAO PAULO (S&P Global Ratings) Jun. 19, 2023--S&P Global Ratings said today that CESP- Companhia Energetica de Sao Paulo's (CESP; ##-/Positive/--) decision to advance receivables related to indemnities totaling approximately R$4.2 billion will support the company's credit metrics. We expect CESP and its parent company, Auren Energia S.A., to use the majority of the proceeds to finance their investment plan. We had already incorporated this into our base-case scenario, which translates into debt to EBITDA of 3.5x-4.0x and funds from operations (FFO) to debt of 15%-20% this year. From 2024 onward, we expect the company's credit metrics will improve, with debt to EBITDA of about 3.0x-3.5x and FFO to debt of 20%-25%, following the startup of the photovoltaic park, Sol de Jafba, which should contribute EBITDA of about R$170 million. The indemnities are related to nonamortized investments of CESP's previous concession, TrOs Irmpos,...

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