Nuove_emissioni, collocamenti Nuove Emissioni (2 lettori)
- Creatore Discussione Giontra
- Data di Inizio
Imark
Forumer storico
A me pare finanche troppo generoso questo B1 sul bond... ed abbiamo un'altra holding che emette, l'ennesima ...
La rating action è utile perché descrive con efficacia il business e ti dice dove finiranno i soldi del bond...
Moody's assigns (P)B1 rating to Infinis' GBP275 million Notes; outlook stable
CFR of B1 and PDR of Ba3 also assigned
London, 09 December 2009 -- Moody's Investors Service has today assigned a B1 Corporate Family Rating ("CFR") and Ba3 probability of default rating ("PDR") to Infinis Holdings. Concurrently, Moody's assigned a provisional (P)B1 senior unsecured rating to the GBP275 million Senior Notes due 2014 (the "Notes") to be issued by Infinis plc ("Infinis"). The outlook on all ratings is stable.
Moody's rating assessment of Infinis Holdings focuses on Infinis plc as the dominant subsidiary but further takes into account other activities and indebtedness within the group.
The assigned ratings are supported by strong cash flow generation from Infinis' electricity production across a diversified portfolio of landfill sites, by management's significant experience in the area and by the attractive regulatory incentives for renewable electricity generation. The ratings are constrained by the limited scale of the group's operations, exposure to volatile electricity prices, landfill gas reserves that will decline over time, high financial leverage and significant refinancing risk.
Infinis operates on 80 sites of which 59 are owned or operated by WRG and which together account for 78% of the company's current capacity. Infinis pays no fee for operating on these sites (other than a small fee in respect of some) and has the right to extract gas for as long as electricity generation is commercially viable. The other 21 sites on which Infinis operates are owned by landfill operators including Cory Environmental, Biffa, Veolia and Viridor. On these sites, Infinis manages the landfill gas and sells the electricity generated in return for the payment of royalties to the owner under the terms of a range of leases.
Moody's believes that the risk of volatility in gas and electricity production is to some extent mitigated by the diversification of Infinis' portfolio. The ten largest sites account for 49% of capacity and the largest (Brogborough) for 11.1% of installed capacity. In addition, gas is typically produced in a number of cells at each site meaning that a problem in one area need not affect the site as a whole and we note that the risk of losses due to engine failure is limited by the number of engines in the portfolio.
Notwithstanding the small scale of the company, Moody's has considered that its exposure to volume and price risk as an electricity generator is further mitigated by Infinis' role and contractual arrangements in the incentivised UK renewable energy market.
Infinis sells its electricity to a range of counterparties, generally under short to medium term contracts and with the benefit of certain regulatory incentives for renewable energy. Approximately 40% of its electricity output in the near future is expected to be sold under the Non-Fossil Fuel Obligation ("NFFO") scheme. This was introduced in 1990 and required the electricity Distribution Network Operators in England and Wales to purchase electricity from the nuclear power and renewable energy sectors at a fixed price (which varied across five different tranches). The remaining output is sold under the more recent (2002) Renewable Obligation ("RO") Order which places an obligation on licensed electricity suppliers in the United Kingdom to source an increasing proportion of electricity from renewable sources.
This proportion increases every year with a target of 15% of total electricity supplied coming from renewables in 2015. Suppliers must meet their obligation each year by presenting the regulator (Ofgem) with Renewables Obligation Certificates ("ROCs") to the full value of their obligation or using a buy-out clause which allows them to pay for any shortfall (or some combination of both). Proceeds received by the regulator under the buy-out clause are redistributed to generators according to the number of ROCs awarded to them. Under the NFFO, Infinis is able to achieve prices of between GBP35 and GBP61/MWh, whilst under the RO the company's current average all-in price for the year ended 30 September 2009 is GBP95.99/MWh.
Infinis sells a significant proportion of the electricity under the RO together with the ROCs and LECs forward to a portfolio of off-takers through competitive tenders. As at 30 September 2009, the company had sold 88.5% and 78% of projected electricity output until October 2010 and October 2011 respectively providing reasonable visibility in respect of earnings in those years. Moody's notes that under the terms of the forward sale agreements, Infinis is not exposed to potential loss if actual output falls short of the amount contracted.
Consolidated leverage on a Debt to EBITDA basis is expected to be close to 4.0x. Management anticipates that the company will benefit from significant free cash flow generation over the medium-term, although Moody's notes that this will be dependent on achieved electricity prices.
Capital investment needs are moderate, and maintenance requirements will reduce over time as the asset portfolio matures. However, Moody's notes the history of acquisitions by Infinis Holdings and the high likelihood that available cash flows will be applied to future investments. We note also that part of the proceeds of the planned financing will be used to fund a dividend payment (albeit through repayment of shareholder loan) and that the transaction will leave the company with a significant refinancing risk on maturity of the Notes, at which time the remaining life of the landfill gas reserves will have shortened.
Infinis has made acquisitions in the past and appears likely to continue to grow in the future through both acquisitions and investment in related businesses including the development of wind farms. Indeed, Infinis Energy Limited ("IEL"), has recently made a public offer to acquire shares in Novera Energy Limited ("Novera"), another renewable energy company with a portfolio of landfill gas, hydro and wind assets with a total capacity of 118MW. Prior to the offer, IEL owned approximately 43% of Novera and its stake has now increased to over 50%.
The consideration for the offer will be met from existing cash reserves within the Infinis group. Given the size of the transaction and the similarities between the two businesses, Moody's does not anticipate that the transaction will impact Infinis' CFR or the rating of the Notes. We note, however, that continued development of the group and investment outside of Infinis may take management's attention away from the core business on which lenders are reliant.
Moody's notes that the terms of the Notes provide certain protections but the provisions are not, in Moody's opinion, sufficient to insulate lenders to Infinis from the risks inherent in the group as a whole.
The indenture has restricted payment and debt incurrence covenants based around a Fixed Charge Cover Ratio of 2.0x and (in the case of restricted payments) a basket based on 50% of Consolidated Net Income. It also permits restricted payments up to an aggregate amount of GBP30 million. A further GBP30 million bucket applies to investments in restricted subsidiaries.
In assigning the (P)B1 rating of the Notes, Moody's has assumed a 65% group Loss Given Default ("LGD"). The 65% LGD assumption reflects the group's debt capital structure, which will primarily consist of the Notes to be issued. The 65% LGD assumption is in line with Moody's general approach towards all-bond transactions. Accordingly Moody's LGD estimate for the Notes is LGD 4. Due to the high LGD assumption, the PDR is assessed at Ba3, one notch higher than the B1 CFR assigned to the group.
The stable outlook reflects Moody's view that Infinis' capital structure is reasonably resilient to downside sensitivities.
Moody's issues provisional ratings in advance of the final sale of securities and these ratings reflect Moody's preliminary credit opinion regarding the transaction only. Upon a conclusive review of the final documentation, Moody's will endeavour to assign a definitive rating to the Notes. A definitive rating may differ from a provisional rating.
The principal methodology used in rating Infinis was Moody's Unregulated Utilities and Power Companies methodology, published in August 2009 and available on OpenDNS in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website.
Infinis Holdings, based in Northampton (England), is a holding company for a group focused on renewable energy. The group's principal subsidiary, Infinis plc, generates electricity from landfill gas with an in-house capacity of approximately 262MW and a further 45MW of outsourced capacity. Infinis accounts for about 33% of the UK landfill gas market, substantially ahead of its peers and it is the second largest renewable electricity generator in the UK, generating 8% of all renewable electricity.
bulogna
Forumer storico
Imark
Forumer storico
Imark
Forumer storico
Fra sei mesi, le obbligazioni ad alto rendimento torneranno a chiamarle junk...
nik.sala
Money Never Sleeps
...e li noi torneremo a comprare...
saverio1973
BOND SUB.
...e li noi torneremo a comprare...
Condivido anche se oggi su qualche nuova emissione si riesce ancora a fare un buon trading.
nik.sala
Money Never Sleeps
beh, se è per quello, anche sulle vecchie. Ma adesso più che trading di breve, va fatto in un'orizzonte temporale più ampio, del resto periodi come marzo/giugno 2009 non li vedremo più per un pezzo...
Imark
Forumer storico
ieri avevo saltato... quello in cima è dell'altro ieri...
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