Nuclear power is “dead and alive” says S&P Global Ratings, covered by the specialist press

A recent report by S&P Global Ratings has concluded that growing competition from cheap renewable electricity, safety concerns, and rising costs of new plants are slowly undermining the viability of nuclear power.

“We see little economic rationale for new nuclear builds in the U.S. or Western Europe, owing to massive cost escalations and renewables cost-competitiveness, which should lead to a material decline in nuclear generation by 2040,” said Elena Anankina, the report’s author.

Despite these challenges, however, nuclear still has its role to play in the energy mix – largely due to the continual development of new nuclear capacity in Russia and China, supported by energy policies and significantly lower construction costs. Moreover, with regions such as Europe installing more intermittent sources, nuclear is playing a crucial role in ensuring grid stability.

Following outreach by Moorgate, news of the report was covered by Republic World, Stockhead here and here, NucNet, IREI, Euractiv, ESI Africa, Power Engineering International, and World Nuclear News.

S&P Global Ratings publishes first Green Evaluation in Canada, covered by the specialist press

S&P Global Ratings recently scored a proposed C$750 million issuance from public-private partnership (PPP) Mobilinx Hurontario General Partnership E1/87 under its Green Evaluation.

The E1/87 score represents the highest on the Green Evaluation E1-E4 scale, and comprises a Governance score of 83, Transparency score of 77, and a Mitigation score of 91.

As well as being the first Green Evaluation in Canada, the score also marks S&P Global Ratings’ first Green Evaluation on a PPP.

Proceeds will be used to design, build, finance, operate, maintain and rehabilitate the Hurontario Light Rail Transit (LRT) project in Ontario, Canada.

Following outreach by Moorgate, the Green Evaluation was covered by: IJGlobal, Proximo, and InfraNews.

S&P Global Ratings names new head of EMEA Infrastructure and Project Finance, covered by the specialist press

S&P Global Ratings recently announced Pablo Lutereau as its new Head of Infrastructure and Project Finance in the Europe, Middle East, and Africa (EMEA) region.

Following the news of his appointment, Mr. Lutereau said, “Infrastructure plays a critical role in EMEA’s economic growth and development in terms of social well-being. As such, I’m very pleased to start the next chapter of my S&P Global Ratings career within the dedicated EMEA team and look forward to building upon our 25-year history of assessing transactions in this market.”

Lutereau moves from S&P Global Ratings’ Buenos Aires office, where he was Head of Infrastructure & Utilities in Latin America. He will start his new role in January 2020 and will be based in Madrid.

Following Moorgate’s outreach, the news was covered by TXF, IJGlobal, PFI, Proximo and Partnerships Bulletin

S&P Global Ratings warns 20 housing associations risk downgrades in no-deal Brexit, covered by the specialist press

In its recent report, S&P Global Ratings indicated that a no-deal Brexit could result in the downgrade of half of the 41 publicly rated U.K. social housing associations (HAs) in its portfolio by one notch. Particularly vulnerable are those ratings on providers that either depend on proceeds from market sales or receive extraordinary support from their related government.

Following outreach by Moorgate, the report was covered by Inside Housing, Social Housing, and Housing Today.

S&P Global Ratings’ Juliana Gallo considers the outlook for France-based ADP in International Airport Review

There could be turbulence ahead for ADP, France’s largest airport operator. A weakening economic environment could weigh on ADP’s credit quality during a period of significant international expansion. What’s more, ADP’s possible privatisation – despite being on hold pending a referendum – carries significant risks (should a change in ownership occur).

Writing for International Airport Review, Juliana Gallo, director, Infrastructure EMEA, S&P Global Ratings, argues that the many credit strengths in the ADP’s favour could allow the group to manage its heavy capex programme and future acquisitions, while maintaining credit metrics commensurate with an ‘A+’ rating.

Please click here to read the full article.

Today’s market conditions could test IPPs, argues S&P Global Ratings’ Aneesh Prabhu in Utility Dive

Market conditions for America’s independent power producers (IPPs) began to turn negative around three years ago – and they’ve barely improved since. In an article for Utility Dive, S&P Global Ratings’ senior director Aneesh Prabhu discusses how IPPs must adapt – or else face an uncomfortable future.

To continue operating against challenging market fundamentals – such as the industry’s fuel switch to natural gas, changing consumer preferences, new technologies and weakening commodity prices – IPPs have had little choice but to deleverage, diversify and, in some instances, go private. Against this backdrop, IPPs, in S&P Global Ratings’ view, cannot carry investment-grade ratings for the time being.

In his concluding remarks, Prabhu comments: “While the silver lining is that credit profiles in this segment are improving, the cloud over IPPs is yet to disperse.”

To read the full article, please click here.

S&P Global Ratings upgrades Germany-owned Deutsche Bahn, covered by the specialist press

On October 8, 2019, S&P Global Ratings upgraded Deutsche Bahn’s (DB) issuer credit ratings to ‘AA’ from ‘AA-’ following the news that the Germany-based rail company is to benefit from increased federal government support. The issuer rating carries a stable outlook.

Under its Climate Action Programme 2030, the German federal government will inject €11 billion into DB over 11 years, as well as reduce value-added tax (VAT) on long-distance rail tickets and raise air travel surcharges – demonstrating stronger-than-ever ongoing support. The government has also approved DB issuing a €2 billion subordinated hybrid note.

S&P Global Ratings’ lead credit analyst, Beata Sperling-Tyler, says: “The federal support package of over €11 billion by 2030, in addition to continued ongoing investment grants that cover about 70% of DB’s capex, will support capital expenditure required to modernise track infrastructure and the operating costs required to improve passenger travel comfort.”

Following Moorgate’s outreach, the issuance and issuer ratings were covered by Global Capital, Climate Change News, Euractiv and Clean Energy Wire.

BRI is a lesson in patience for financial institutions, says Commerzbank in The Asset

Writing for The Asset, Commerzbank’s Agnes Vargas and Hans Krohn assess the opportunities that the Belt and Road Initiative (BRI) may bring for Europe’s small- and medium-sized enterprises, and how they can engage with the project.

While the “first phase” of the BRI – the construction of large-scale infrastructure – largely excludes SMEs across Central Europe, it is the “second phase” – financing and trade opportunities along these revived trading corridors – for which international financial institutions should be preparing.

Given the enormity and volume of the infrastructure projects defining the first phase, it is likely to be some years until these projects will link to enable the second phase’s transcontinental trade flow. So for the time being, European SMEs should treat the BRI as a lesson in patience. In the meantime, advise Vargas and Krohn, financial institutions should take advantage of the time they have to prepare.

To read the full article, please click here (requires subscription).

 

ESG pressures weigh heavily on auto industry, says S&P Global Ratings’ Vittoria Ferraris in Automotive World

As environmental, social, and governance (ESG) considerations continue to be pushed to the fore of investors’ considerations, the automotive industry is feeling the pressure.

Speaking to Automotive World, Vittoria Ferraris, Senior Director, S&P Global Ratings, warns that while the industry has long dealt with pressures relating to the environmental impact of their products, these will be felt more strongly than ever, with growing numbers of climate-related regulation—and subsequent fines for non-compliance—threatening to reduce profitability. What’s more, as ESG considerations proliferate, the automotive sector is increasingly addressing social and governance factors as well.

To read the full article, please click here (behind paywall).

S&P Global Ratings discusses Spanish utilities regulatory review with Infrastructure Investor

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).