S&P turns WindMW outlook to negative

S&P said it revised its outlook for WindMW GmbH to negative from stable and affirmed the BBB- rating on its senior secured notes.

The negative outlook is based on three factors: refinancing risk for its notes due in 2027, production shortfalls, and the negative outlook on Siemens Gamesa Renewable Energy SA, which has an operations and maintenance contract with WindMW.

“In 2023, electricity production fell short of the one-year P90 level assessed at closing for the third consecutive year, even though the turbine blades were upgraded in 2021,” S&P said in a press release.

Additionally, “Lower price forecasts over the project's merchant phase (2028-2040), combined with uncertainty around whether the transaction's cash sweep mechanism would be activated, increased refinancing risk. The mechanism, which is designed to limit refinancing risk, aims to trap excess cash in the structure during the three years before 2027, if electricity prices are low. This would, in turn, reduce the €119 million balloon amount that will need to be refinanced when the outstanding debt matures in 2027, subject to a floor of €50 million,” the agency said.

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