The latest edition of IFR Outlook – S&P’s monthly newsletter summarising key infrastructure and project finance-related research and rating news – suggests energy markets around the world are under tough scrutiny. In the front page feature, Pierre Georges, director of EMEA utilities, explains that in an environment of weak power prices, Europe’s nuclear fleets face constrained creditworthiness – noting that ratings on six of Europe’s main nuclear operators carry a negative outlook. Further afield, associate director Karim Nassif finds that low oil prices continue to test the resilience of corporates and infrastructure companies in the Gulf, and suggests that large Government-Related Entities (GREs) with important infrastructural mandates will be best able to weather the storm as the market shifts and the region adapts to tightened purse strings. In a separate feature, S&P’s Thomas Watters looks ahead to the next official meeting of OPEC, suggesting that depending on the deal reached there, commodity prices could stabilise.
This month’s issue also welcomes a guest contribution from Ben Caldecott, director of the Sustainable Finance Programme at the University of Oxford, who offers a run-down of the next big thing to hit environmental risk analysis in debt markets: asset level data. He highlights the ways in which this new method of assessing risk can improve transparency and accuracy for analysts and investors alike.
When it comes to transport infrastructure, the November edition has got it covered. S&P’s Maria Lemos shows that while demand for infrastructure assets has risen among both corporate groups and institutional investors, the stability of ratings on transport groups is unlikely to be affected. Philip Baggaley, meanwhile, looks at the potential impact of the newly signed global airline emissions agreement, the ‘Carbon Offset and Reduction Scheme for International Aviation’ (CORSIA). Announced by the UN’s International Civil Aviation Organization (ICAO), Baggaley explains that this historic agreement will have little near-term credit impact but could potentially lead to long-term costs.
In other news, S&P has downgraded its rating on energy company EDF to ‘A-/A-2’ in the wake of the UK’s approval of Hinkley Point C, while its rating on High Speed Rail Finance PLC has been put on CreditWatch ‘Negative’ after a proposed debt issuance is likely to weaken the project’s financial profile.