Moody’s gives Valia notes Baa3

Moody's Investors Service said it assigned a Baa3 rating to the upcoming issuance of up to $520 million backed senior secured notes due 2039 to be issued by the co-issuers Buffalo Energy Mexico Holdings, SA de CV; Buffalo Energy Infrastructure S.A. de CV and Buffalo Energy, SA de CV (Valia Energia). The outlook is stable. This is the first time Moody's is rating Valia Energia.

“The Baa3 rating acknowledges the advantageous market position of Valia Energia's generation portfolio in the Mexican energy sector, geographically located in clusters of increased industrial activity and demand growth. It also incorporates the proven combined cycle gas technology and operating track record, particularly at certain subsidiaries that operate with state-of-the-art GE turbines, along with stable and low-cost access to natural gas,” the agency said in a press release.

Moody’s also noted, “Tempering the credit profile are the structural subordination of proposed debt to Sunrise's operating company debt of roughly $609 million (roughly 54% of total debt) and the subordinated claim on the EVM I and EVM II assets (which compose roughly 30% of total portfolio's capacity).”

The outlook reflects an expectation that Valia will deliver visible and steady “cash flow in the medium term and that the counterparty risk, consistent with an investment-grade profile, will remain unchanged over the next 12-18 months,” the agency said.

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