Infraestructura Energetica Nova S. A. B. de C. V.

The negative global scale rating outlook on IEnova reflects that on the parent and our expectation that a downgrade of the latter in the following 12 months would trigger a same rating action on the subsidiary. The negative outlook on Sempra and its subsidiaries incorporates our view that the ratings would remain vulnerable to a downgrade if San Diego Gas&Electric Co (SDG&E) decides to participate in the liquidity fund under California's AB 1054 statute. The stable national scale rating outlook reflects our expectation that IEnova will continue to benefit from stable and predictable cash flows because the bulk of its business relies upon long-term, take-or-pay contracts, while its new projects will do the same once they begin operations

...The company to continue benefiting from a stable revenue base, mainly thanks to its long-term contracted nature. We continue to expect most of Infraestructura EnergTtica Nova S.A.B. de C.V. (IEnova's) revenues to come from long-term, take-or-pay, dollar-denominated contracts with no commodity exposure, which in our view, is a credit strength, resulting in a stable and predictable cash flow generation. The contracts' remaining term is about 22 years, with investment-grade counterparties such as Comisi=n Federal de Electricidad (CFE; foreign currency: ###+/Stable/--; local currency: ###+/Stable/--) and other private-sector, high-quality customers. IEnova is a moderately strategic subsidiary. The ratings on IEnova currently incorporate the support from its parent, Sempra Energy (Sempra; ###+/Negative/A-2). IEnova is a profitable business that we believe is important to the group's long-term strategy, and the company is likely to receive financial assistance if necessary, as seen in the disbursement...

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