Research Update: Aydem Renewables Affirmed At 'B' On Supportive Tariff Mechanism Despite Worsening Economic Conditions; Outlook Stable

Turkey-based renewable electricity generator Aydem Renewables (Aydem Yenilenebilir Enerji A.S.) continues to benefit from the U.S. dollar-linked supportive feed-in tariff, YEKDEM, that covers 87% of revenue (at end-2021), as well as from adequate liquidity, with no debt maturities over the next 12 months. That said, we acknowledge the mounting financial stability risks in Turkey, apparent in the marked depreciation of the lira, banks' reduced willingness to grant long-term loans, and soaring inflation, alongside risks related to the state-regulated price cap mechanism. We revised down our assessment of Aydem Renewables' stand-alone credit profile to 'b' from 'b+', and we continue to factor in our view of the 'b' group credit profile of the parent, Aydem Enerji. We affirmed our 'B' ratings

...- Turkey-based renewable electricity generator Aydem Renewables (Aydem Yenilenebilir Enerji A.S.) continues to benefit from the U.S. dollar-linked supportive feed-in tariff, YEKDEM, that covers 87% of revenue (at end-2021), as well as from adequate liquidity, with no debt maturities over the next 12 months. - That said, we acknowledge the mounting financial stability risks in Turkey, apparent in the marked depreciation of the lira, banks' reduced willingness to grant long-term loans, and soaring inflation, alongside risks related to the state-regulated price cap mechanism. - We revised down our assessment of Aydem Renewables' stand-alone credit profile to 'b' from 'b+', and we continue to factor in our view of the 'b' group credit profile of the parent, Aydem Enerji. - We affirmed our 'B' ratings on Aydem Renewables and its debt. - The stable outlook on Aydem Renewables reflects our expectation that the YEKDEM tariffs will not undergo revisions, providing stability to the company's revenue...

Research Update