Infraestructura Energética Nova S.A.P.I. de C.V.

Overview Key strengths Key risks Core subsidiary of its immediate parent, Sempra Infrastructure Partners (SI). Exposure to Mexico's government-related entities. Stable and predictable revenue base coming from long-term contracts with no commodity-price exposure. Although not expected in the short term, a shift in the group?s strategy towards an aggressive expansion in its operations at the level of IEnova, could raise capex and debt, deteriorating the company?s metrics. Deleveraging as a result of lower-than-expected capital expenditures (capex) for the upcoming two years. Solid market share under the installed capacity for the natural gas transportation business in Mexico, representing 35%-40%. We consider IEnova to have a high importance to the group, and in particular to SI. IEnova generates nearly half of SI's

...We continue to view Infraestructura EnergTtica Nova S.A.P.I. de C.V. (IEnova) as a core subsidiary of SI. We consider IEnova to have a high importance to the group, and in particular to SI. IEnova generates nearly half of SI's adjusted EBITDA and is in line with the parent's long-term strategy in the midstream and liquefied natural gas (LNG) sectors. As a result, we believe the company would receive extraordinary support, if needed, from the parent. Therefore, we equalize the global scale rating and outlook on IEnova with those on SI. The company's performance will continue to benefit from stable revenue, mainly thanks to its long-term contracted nature. IEnova's revenue benefits from long-term, take-or-pay, dollar- denominated contracts with no commodity exposure. We view this as a credit strength, resulting in stable and predictable cash flows. The contracts' remaining terms are about 20 years with investment-grade counterparties. Moreover, we expect that IEnova's projects starting operations...

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