Engie Energia Chile S.A. 'BBB' Ratings Affirmed Despite Weakening Financial Metrics, Outlook Remains Stable

Financial performance of the Chilean power generator Engie Energia Chile S.A. (Engie Chile) weakened due to increased energy spot and fuel prices and an extraordinary incident at the Freeport terminal that reduced the company's capacity to receive gas, and therefore, generate through more efficient technologies. We revised our forecast and now expect the company's leverage to fall to the 3.0x-3.5x range in 2023 and 2024 due to backup power purchase agreements (PPAs) signed with other generators and due to additional renewable capacity coming online 2022, after peaking at 6.5x-7.0x in 2022. We revised downward Engie Chile's stand-alone credit profile (SACP) to 'bb+' from 'bbb-', reflecting a more volatile scenario in the short to medium term than we expected that will

...August 17, 2022 - Financial performance of the Chilean power generator Engie Energia Chile S.A. (Engie Chile) weakened due to increased energy spot and fuel prices and an extraordinary incident at the Freeport terminal that reduced the company's capacity to receive gas, and therefore, generate through more efficient technologies. - We revised our forecast and now expect the company's leverage to fall to the 3.0x-3.5x range in 2023 and 2024 due to backup power purchase agreements (PPAs) signed with other generators and due to additional renewable capacity coming online 2022, after peaking at 6.5x-7.0x in 2022. - We revised downward Engie Chile's stand-alone credit profile (SACP) to '##+' from '###-', reflecting a more volatile scenario in the short to medium term than we expected that will dent the company's EBITDA, margin stability, as well as main credit metrics. - However, on Aug. 17, 2022, S&P Global Ratings affirmed its '###' issuer credit and issue-level ratings on Engie Chile. This...

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