S&P cuts ILAP

S&P said it lowered its rating on Inversiones Latin America Power Ltda.’s senior secured notes due 2033 to B+ from BB- and removed the rating from CreditWatch with negative implications.

The agency said it sees improved prospects for the Chilean electricity market for the rest of the year after a tough until July.

S&P said it now forecasts ILAP’s debt service coverage ratio to stay below 1x by the next interest payment date. “Although ILAP has a six-month debt service reserve account (DSRA) to cover any cash shortfall, we don't view the expected metric as consistent with the current rating.”

The outlook is negative, which means a one-in-three possibility of a downgrade in the next six to 12 months, if the cash deficit by the next interest payment date is wider-than-expected or if ILAP’s DSCR falls below 1x in 2023, the agency said.

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