Fitch affirms Drax Group

Fitch Ratings has affirmed Drax Group Holdings Ltd.'s long-term issuer default rating at BB+ with a stable outlook and Drax Finco plc's senior secured notes at BBB- with a recovery rating of RR2.

“The affirmation reflects Drax's good earnings visibility for the next three years, based on regulatory support and a clear hedging policy,” the agency said in a news release.

“It also reflects Drax's sufficient leverage headroom and strong operational performance.

“However, Fitch expects a moderately increasing leverage trend on the back of a lower market price environment, increasing biomass costs and high capex expectations.”

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