In October’s Infrastructure Outlook – Standard & Poor’s monthly newsletter rounding up all the key ratings updates and research relevant to infrastructure and project finance – Karim Nassif, an associate director based in Dubai, examines how some corporate and infrastructure companies in the Gulf Cooperation Council are suffering on the back of low oil prices. He explains that if prices fail to rebound shortly, economic growth in the area will continue to weaken – given that oil is, by far, the largest export – which would impact corporate credit prospects and potentially cause significant delays or cancelation of infrastructure projects.
Energy is covered significantly in the issue; with a focus on S&P’s ‘BBB’ credit rating on the bonds issued to Spanish solar power project Solaben. Elsewhere, as governments and corporates alike become more carbon conscience, Outlook looks at structural shifts occurring within Europe’s energy giants. Germany-based utility E.ON, for example, has announced a change in its transaction structure in response to a new law that reinforces utilities’ responsibilities on nuclear liabilities in Germany, which, in turn, lead to the affirmation of its short-term corporate credit rating.
Closer to home, in the U.K., the outlook on Scotland and Southern gas network Scotia was revised to ‘positive’ – a result of their improving financial risk profile and their track record of outperformances.
To view these articles and other key ratings movements, please see the full version of S&P’s October infrastructure newsletter, which includes a short video, here.