Research Update: Turkey-Based Electricity Generator Aydem Renewables Assigned 'B' Rating; Outlook Stable

Aydem Renewables (Aydem Yenilenebilir Enerji A.S.), an independent Turkey-based electricity generator with currently 1GW installed capacity, issued $750 million 5.5-year bond with a coupon rate of 7.75% to refinance all of its existing debt. Aydem Renewables benefits from a favorable fixed USD-linked renewable energy support mechanism (YEKDEM) tariff covering 89% of its revenues in 2020; low-cost hydro operations (84% of installed capacities); low maintenance costs as the fleet is relatively new; and projected improvement in credit metrics on the back of increased power production. These strengths are mitigated by the small scale of the company; observed strong volatility of hydro levels affecting output; high country risks; and projected negative free operating cash flow (FOCF) in 2021-2022 because of sizable growth

...- Aydem Renewables (Aydem Yenilenebilir Enerji A.S.), an independent Turkey-based electricity generator with currently 1GW installed capacity, issued $750 million 5.5-year bond with a coupon rate of 7.75% to refinance all of its existing debt. - Aydem Renewables benefits from a favorable fixed USD-linked renewable energy support mechanism (YEKDEM) tariff covering 89% of its revenues in 2020; low-cost hydro operations (84% of installed capacities); low maintenance costs as the fleet is relatively new; and projected improvement in credit metrics on the back of increased power production. These strengths are mitigated by the small scale of the company; observed strong volatility of hydro levels affecting output; high country risks; and projected negative free operating cash flow (FOCF) in 2021-2022 because of sizable growth capital expenditure (capex). S&P Global Ratings assesses Aydem Renewables' stand-alone credit profile as 'b+'. - We also believe Aydem Renewables' creditworthiness is weighed...

Research Update