General Announcement::PERU LNG S.R.L. Latest rating update Fitch Ratings

Issuer & Securities

Issuer/ Manager
PERU LNG S.R.L.
Securities
PERU LNGUS$940M5.375%N300322A - US715604AA27 - 8NRB
PERU LNGUS$940M5.375%N300322R - USP7721BAE13 - 8NSB
Stapled Security
No

Announcement Details

Announcement Title
General Announcement
Date &Time of Broadcast
27-Mar-2020 06:28:55
Status
New
Announcement Sub Title
PERU LNG S.R.L. Latest rating update Fitch Ratings
Announcement Reference
SG200327OTHRX360
Submitted By (Co./ Ind. Name)
Winnifer Kindlimann
Designation
Treasury and Financing Supervisor
Effective Date and Time of the event
20/03/2020 00:00:00
Description (Please provide a detailed description of the event in the box below)
Peru LNG Downgraded to 'BB-' from 'BBB-': PLNG's downgrade reflects Fitch's expectation that leverage will remain at higher levels during 2020-2022 due to lower EBITDA generation, given the company`s exposure to lower international gas prices. Per Fitch's recently updated Oil & Gas Price Deck reflecting a deteriorated scenario for Henry-Hub (HH) and National Balance Point (NBP) indexes, net leverage will reach a peak of roughly 18.5x during 2020, and remain above 8.0x during 2021-2022, consistently above the 4.5x originally expected. The higher leverage is supported by its liquidity. The company reported USD140 million of cash on hand, with an additional USD75 million on committed undrawn credit line facility, covering annual interest payments of roughly USD50 million of PLNG`s outstanding USD940 million notes. Going forward, Fitch estimates total capex of USD15 million during 2020, including PLNG`s investments to increase port availability (USD5 million), and ethane recovery project (USD8 million) and total capex during 2021 will reach approximately USD35 million, incorporating USD20 million, to complete the port availability project and USD15 million for major maintenance at the plant. Fitch expects PLNG to not distribute any dividends over the rating horizon in order to accumulate cash to make front-to-debt amortization payments starting in September 2024.