S&P gives Acu Petroleo notes BB

S&P said it gave preliminary BB issue and 2 recovery ratings to the $650 million of senior secured amortizing notes due 2035 to be guaranteed by Acu Petroleo SA (the project). Acu Petroleo Luxembourg Sarl will sell the notes.

“The preliminary ratings incorporate the project's strong competitive position, considering that it connects one of the most prolific oil areas in the world. On the other hand, we expect significant volatility in its cash flows in a potential market downside scenario, considering that in the long term, the project's contracted position is low,” S&P said in a press release.

The agency said it forecasts a minimum and average annual debt-service coverage ratio of 1.25x in the project’s first stage and in the second stage minimum and average metrics slightly higher, at 1.5x and 3.5x, respectively.

The outlook is stable.

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