Fitch Rates Brookfield Power's C$350MM Unsecured Debentures 'BBB'; Outlook Stable
Fitch rates Brookfield Power Corporation's issuance of C$200 million 5.25% Unsecured Debentures, Series 3 due November 5, 2018 and C$150 million 5.84% Unsecured Debentures, Series 4 due November 5, 2036 (collectively, the Debentures) 'BBB'. The Debentures are unconditionally guaranteed by Brookfield Power Inc. (BPI). The Ratings Outlook for BPI is Stable. Proceeds from the offering will be used to retire debt and for general corporate purposes.
The assigned rating reflects the low-cost and long-lived nature of BPI's hydro-electric generation fleet. Approximately 45% of BPI's revenues are derived from assets under contract, while an additional 25% is obtained through financial contracts which extend 12 to 24 months. While consolidated leverage is high for the ratings category and there is significant spot market exposure on the un-contracted portion of the company's generation, even under stress scenarios, coverage measures remain reasonable.
Brookfield Power is a holding company for electricity assets, primarily located in the northeast (Quebec, Ontario, New England, and New York). The company is a wholly owned subsidiary of Brookfield Asset Management Inc. (formerly Brascan Corporation), a publicly traded conglomerate with activities in a wide range of industries including real estate, power and asset management.
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