Ratings roundup: SADM downgrade, Aguas de Buga assigned, Essal affirmed

Monday, November 7, 2011

Ratings agency Moody's has downgraded Mexico's Monterrey water utility SADM's global scale local currency to Ba1 from Baa3 and its national scale rating to A1.mx from Aa3.mx.

The utility's outlook was changed to negative from stable, a press release from the agency reads.

The action on SADM's issuer rating follows Moody's downgrade of Nuevo León state, as the utility "shares the same own-source revenue base" as the state.

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The negative outlook reflects "uncertainty on the margin of action that SADM will have to impose future tariff increases to cover an ambitious capital expenditure program to provide water from new sources," the note reads.

To read the full report, in English, go to this link. For Spanish, this link


Fitch Ratings has assigned an A(col) national scale rating to Colombian water utility Aguas de Buga, serving Valle del Cauca department, with a stable outlook.

The rating reflects the company's solid operational indicators, including high collection levels, and its stable income sources, which have contributed to adequate credit indicators, Fitch said in a research note.

The rating also takes into account Aguas de Buga's liquidity levels, as well as climate and political risks.

The full report, in Spanish, is available here


Finally, Chilean ratings agency Feller Rate has affirmed its solvency rating at AA on local water utility Essal, with a stable outlook.

The agency also affirmed Essal's bond series at AA, Feller said in a research note.

The affirmation is based on the stable regulatory framework in which Essal operates, as well as its condition as a unit of Chile's largest water utility, Aguas Andinas, itself controlled by France's Suez Environnement. The company has low operational risks and ample financial flexibility.

The Chilean government is expected to sell its 40.5% stake in Essal by the end of the year.

To read the full Feller release, in Spanish, go to this link