In a recent report, S&P Global Ratings has addressed the questions playing on the minds of investors over the past few weeks: how likely is an escalation of U.S.-Iran tensions, and how would it impact financial institutions and governments in GCC countries?
“While we don’t expect the current geopolitical tensions to lead to any rating actions under our base-case scenario,” explained Timucin Engin, Senior Director, S&P Global Ratings, “we do expect corporates in some sectors to face some operating weakness arising from the geopolitical tensions.”
Following outreach by Moorgate, the report was covered by Trade Arabia, Arabian Business, Gulf News, Islamic Business and Finance, and Banker Middle East.
Following the announcement of Spain’s National Commission on Markets and Competition (CNMC)’s plans for the new regulatory period, S&P Global Ratings’ Massimo Schiavo and Gerardo Leal gave an exclusive comment to Infrastructure Investor on the impact of the update on the credit quality of utilities in the country.
“This is harsher than we were expecting,” said Schiavo of the regulatory review, which could see revenues reduced by up to 22% for gas distribution and transmission companies.
Please click here for the full article (behind paywall).
As focus on environmental, social, and governance (ESG) factors increases due to their potential impact on profit margins, Michael Ferguson, Director, Sustainable Finance at S&P Global Ratings, explores some of the most pressing risks affecting infrastructure classes, as well as the ESG opportunities that are being unearthed in the latest edition of GLIO.
“As ESG awareness and disclosure practices take root,” says Ferguson, “entities across the sector could be both better prepared for longer term, emerging ESG risks and able to anticipate strategic opportunities, rather than playing catch-up.”
To read the full article, please click here.
Writing for Renewables Investor, Timucin Engin, Senior Director, GCC Region at S&P Global Ratings, considers the growing support for sustainable finance across the Gulf Cooperation Council (GCC).
While the green bond market in the GCC is still in its infancy, Engin argues that the region’s huge investment in renewables – which serves both to alleviate the pressures of falling oil prices and further promote sustainable practices among GCC members – could spur transactions funded via green finance.
To read the article, please click here.
Last week, U.K. water regulator Ofwat confirmed its plans to sharply reduce the returns available to water companies over the next five years.
S&P Global Ratings’ director Matan Benjamin comments that the proposals will result in a cut in allowed cost of capital in real terms to around 2.2% from 3.4% in the current regulatory period. He continues that the latest announcement from Ofwat “provides another indication that the next regulatory period for water utilities could be challenging”.
Following outreach by Moorgate, the comments were covered by InfraNews (behind paywall) and Environment Analyst (requires subscription).
While ESG investing has taken time to gain a foothold in the fixed income market, ESG considerations have recently come to the fore and – according to Corinne Bendersky, Associate Director of Sustainable Finance, S&P Global Ratings – they are here to stay.
Growing recognition of the of ESG-related risks, a growing base of values-minded investors and a changing regulatory landscape have all been key drivers of the relatively recent rise of ESG-related considerations in fixed income, says Bendersky. And as further regulatory frameworks come into effect, S&P Global Ratings believes that we will see an increasing number of companies and investors seeking to meet compliance requirements and satisfy their stakeholders by incorporating ESG factors.
To read the full article, please click here (behind paywall).
As environmental appeal and regulatory support grow, technology improves, and costs decrease, solar energy is becoming increasingly accessible and thus, commonplace.
Speaking to Energy CIO, Michael Ferguson, Director, Sustainable Finance at S&P Global Ratings, explores the challenges holding back the proliferation of solar, and the ways in which the industry is working to overcome these obstacles.
Please click here for the full article.
Regulatory reset risk is high for U.K. utilities, with an updated regulatory framework for water companies coming into effect from April 2020. This will be followed by gas and electricity transmission and gas distribution networks the following April, with a reset for electricity distribution scheduled for 2023.
In its recent report, S&P Global Ratings outlines the outlook for water, gas and electricity transmission and gas distribution, and electricity distribution networks. One key takeaway is that S&P Global Ratings believes that political, competitive and regulatory pressures may gradually undermine the credit quality of some U.K. utilities.
Following outreach by Moorgate, news of the report was covered by WaterBriefing, Environment Analyst, Infrastructure Investor, and Partnerships Bulletin.
As the start of the California wildfire season approaches, a recent S&P Global Ratings report examines the potential credit risks that California’s regulated investor-owned electric utilities continue to face, and the potential impact of this on credit ratings.
In the report, S&P Global Ratings indicates that should California’s lawmakers fail to implement concrete legislation addressing these risks, this would likely lead to a downgrade of the state’s electric utilities’ credit ratings, possibly below investment grade.
Following Moorgate outreach, the report was covered by Sacramento Bee, Insurance Journal (followed with another writeup here), and Bloomberg.
S&P Global Ratings has been identified as the “best credit rating agency for integrating sustainability and corporate governance factors” by respondents of the Independent Research in Responsible Investment (IRRI) annual survey. This is the first year of the category’s inclusion.
Collating over 33,000 data points from nearly a thousand verified industry respondents, the survey presents 61 industry insights and identifies industry leaders in 20 categories.
The results of the survey can be found here.