Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

 

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

Terms of One-Time Website Use

 

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

 

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

 

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

 

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's downgrades Abengoa Yield's CFR to B1 from Ba3; outlook negative

10 Dec 2015

New York, December 10, 2015 -- Moody's Investors Service, ("Moody's") today downgraded the ratings of Abengoa Yield plc (ABY), including its Corporate Family Rating (CFR) to B1 from Ba3, the Probability of Default Rating to B1-PD from Ba3-PD, its senior unsecured rating to B2 from B1, and lowers speculative grade liquidity rating to SGL-4 from SGL-3. The outlook remains negative.

RATINGS RATIONALE

The downgrade of ABY's ratings is driven by ABY's high leverage (consolidated debt to EBITDA exceeds 7.0x) and tight liquidity profile. The Speculative Grade Liquidity (SGL) rating of SGL- 4 reflects the expectation that ABY will have about $43 million of cash at the parent level and full utilization of its $415 million credit facility at year-end in the wake of all yieldcos' current constrained access to capital from both the debt or equity markets.

ABY's negative outlook reflects the potential contagion risk that may surface from the financial challenges at its sponsor and 47.1% owner, Abengoa S.A. (Caa2 negative). On 25 November 2015, Abengoa S.A. announced that it had made a formal filing under Article 5 bis of the Spanish Insolvency Law, which though not a default in itself, is a pre-insolvency procedure. This filing is scheduled for a four month period and is a possible precursor to a more formal restructuring or a distressed exchange filing.

Moody's believes that there are separateness provisions, including the ownership structure of ABY and its Board of Directors' composition, that insulate ABY and any of its assets from being pulled into an Abengoa reorganization; however, ABY is not completely immune from being affected from a liquidity and credit quality perspective. Specifically, a subsequent Abengoa debt restructuring would be an event of default in the debt financings currently at five of ABY's assets. If unremedied, this could prevent project level distributions from being paid to ABY and in the extreme and unlikely case, could lead to an acceleration of those project's indebtedness. ABY will try to attain waivers for the five affected projects, but there is a possibility that lenders may not waive their rights under the credit agreements. Of greatest concern are the Solana and Mojave solar projects which are funded by the US Federal Financing Bank and guaranteed by the US Department of Energy. Dividends from these two projects are material and approximate 26% of ABY's $287 million of anticipated cash flows available for distribution (CAFD) in 2016.

Project level distributions to ABY are the yieldco's only source of cash flow for debt service and for dividend distributions to its shareholders. If cash becomes trapped at those projects ABY will be hard pressed to meet all of its anticipated liquidity requirements in 2016 given the full utilization of its existing credit facility. For 2016 these requirements include the shareholders' quarterly cash distributions that are currently expected to aggregate up to $215 million as well as ABY's holding company level operating and interest payments which Moody's calculates will hover around $50 million. Failure to receive distributions from these projects would also weaken ABY's holding company only debt coverage metrics. This is a credit negative, particularly considering that ABY's credit facility includes two financial covenants, a maintenance leverage ratio of holding company debt to CAFD currently of 5.5x before debt service and an debt service coverage ratio of CAFD to debt service payments of 2.0x. As of September 30, 2015, ABY was comfortably in compliance with both financial covenants.

Moody's acknowledges that ABY's credit facility is made up of two tranches, Tranche B ($290 million) and Tranche A ($125 million) that expire in December 2017 and 2018, respectively. Moody's also factors in ABY's anticipation that at year-end 2015 the projects will record accumulated unrestricted cash balances in excess of $200 million that are not subject to project debt reserve requirements; however, ABY's access to this cash is also subject to the permissible distribution schedules foreseen under each project's debt arrangements.

The negative rating outlook also considers the challenges for ABY to continue to operate its business as the sponsor and operator of a significant portion of its assets, faces the real prospect of insolvency. Should Abengoa file for insolvency proceedings Spanish insolvency law has a two-year "look-back" period, which could potentially enable Abengoa creditors to examine all intercompany transactions between Abengoa and ABY, including the assets that were sold by Abengoa to ABY. While it is difficult to access this potential risk for ABY, the two year duration for "look-backs" could be problematic, particularly given the historical interlocking relationships that exist between Abengoa, ABY and the individual projects.

On a positive note, Moody's understands that ABY continues to pursue its strategic direction and intends to maintain ABY's inherent strengths and create greater autonomy from Abengoa. Key aspects of this plan include maintaining strong operational performance at its project level assets; creating a new brand and corporate identity; hiring a new, non-Abengoa affiliated CFO; and finding a new sponsor. To this end, Moody's understands that ABY has hired an advisor to lead the search for a new sponsor. From an ABY bondholder perspective, Moody's believes that ABY has some flexibility to manage through its current liquidity challenges. Moody's understands that all of the underlying projects are performing well which could facilitate an asset sale or a project level debt refinancing which, if completed, would provide improved liquidity prospects at ABY. While a last resort option for a yieldco company, Moody's analysis also considers that ABY has the ability to alter its current dividend policy which could provide downside protection for creditors. This considers that, despite the possible cash traps, total project level cash distributions are likely to remain greater than ABY's combined corporate overhead and debt service requirements.

Given the negative outlook and the challenges that exist for ABY, some of which are beyond their control, limited prospects exist for a rating upgrade. The rating outlook could stabilize if Abengoa's bankruptcy filing, in and of itself, does not negatively affect the expected project level distributions to ABY, or if ABY's management is able to secure waivers from the project lenders or achieves some alternative arrangement which eliminates or substantially limits the extent of any cash traps, including a project level refinancing. Moody's would also consider stabilizing ABY's outlook if management implements measures that enhances ABY's liquidity profile, including asset sales or a reduction of the company's common dividend should its cash flows be significantly affected by the potential cash traps. Additionally, the rating could be stabilized if an Abengoa restructuring does not result in Abengoa's creditors successfully raising potential fraudulent conveyance claims concerning the value at which the assets were acquired by ABY.

ABY's rating is likely to be downgraded if Abengoa's insolvency procedure negatively impacts ABY's operations and/or liquidity profile, including if Abengoa's creditors gain traction in pursuing fraudulent conveyance claims; if Abengoa's insolvency results in some other unanticipated negative credit consequences for ABY including its inability to replace Abengoa under its hedging program with a creditworthy counterparty such that its cash flows become more exposed to foreign currency risk; if there is further deterioration of ABY's leverage such that ABY's consolidated debt to EBITDA exceeds 8.0x and/or its corporate debt to CAFD exceeds 3.0x for an extended period of time; if the operational performance at ABY's largest projects weaken materially for a sustained period; or if the planned change in Abengoa's ownership of ABY leads to deterioration in the company's corporate finance policies, strategy and/or business profile, including a more than anticipated increase in its exposure to emerging markets.

Abengoa Yield plc (ABY) is a total return company (yieldco), which owns a diversified portfolio of contracted assets in solar, wind, natural gas power generation, electric transmission and water assets in North America, South America and certain markets in EMEA.

The principal methodology used in these ratings was Unregulated Utilities and Unregulated Power Companies published in October 2014. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Natividad Martel
Vice President - Senior Analyst
Infrastructure Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

William L. Hess
MD - Utilities
Infrastructure Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's downgrades Abengoa Yield's CFR to B1 from Ba3; outlook negative
No Related Data.
© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $5,000,000. MCO and Moody’s Investors Service also maintain policies and procedures to address the independence of Moody’s Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY550,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.