Politics affecting projects; the focus of S&P’s July Infrastructure Outlook

In the July edition of Standard & Poor’s monthly infrastructure newsletter Michael Wilkins, Managing Director of Infrastructure Finance, explains that global infrastructure firms, and the projects in which they are involved, face significant exposure to political risk. With the help of notable examples and case studies, Wilkins explores the key drivers of such risk with regards to infrastructure and project financings, analysing their impact on creditworthiness. In a second prominent feature, credit analysts Alexander Griaznov and Sergei Gorin provide a case in point, explaining how few Russian utility and power companies have managed to issue debt as a result of political unrest since the start of the Russia-Ukraine crisis, a situation exacerbated by the former’s weak economy and high ruble volatility.

Similarly in Europe we see politics affecting power companies. For instance, ratings on Greek corporations Ellaktor S.A. and Public Power Corp. were lowered due to the same action on Greece. On the flip side, two Ireland-based multi-utilities were raised on the sovereign upgrade.

In other news, Spanish Motorway Project Sociedad Concesionaria Autovia de la Plata has been assigned a ‘BBB’ rating and German utility giant E.ON SE’s long-term rating was lowered to ‘BBB+’ as a result of weaker credit metrics.

To view these articles and other key rating movements, please see the full version of S&P’s July infrastructure newsletter in pdf or e-book format.

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