Fitch rates Aqualia notes BBB-

Fitch Ratings said it published ratings on FCC Aqualia SA, including a long-term issuer default rating of BB+ and senior secured rating of BBB- on its proposed €1.35 billion notes.

The outlook is stable.

The ratings reflect the company's low recourse business risk as a water and wastewater networks operator in Spain with long-term concession agreements operated under a regime of local natural monopoly, Fitch said.

In addition, water-related engineering procurement and construction activity is marginally adding risk to the overall business profile, the agency said.

The ratings also consider the aggressive leverage following the proposed refinancing, Fitch said.

The agency said it foresees Aqualia's recourse funds will progressively improve from 7.7x after refinancing and will closing at about 5.5x by year-end 2021 on the back of steady cash-flow generation, limited capital expenditure and constrained dividends.

Aqualia's business profile is supported by its core activity as a water and wastewater networks operator in Spain with long-term concessions operated under local monopoly regimes, Fitch said.

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