DBRS Morningstar Assigns Credit Rating of BBB (high), Stable, to Acciona Energía Financiación Filiales S.A.’s EUR 500 Million Euro Medium Term Notes Issuance

DBRS Ratings GmbH (DBRS Morningstar) assigned a credit rating of BBB (high) with a Stable trend to the EUR 500 million Green Bonds (the Bonds) issued by Acciona Energía Financiación Filiales S.A. (Acciona Energía FF or the Company) on 16 October 2023 (ISIN code XS2698998593). The Bonds were issued under the Company’s EUR 3 billion Euro Medium Term Note (EMTN) programme. The Bonds will mature in April 2031 with a fixed annual coupon of 5.125%. The credit rating being assigned is based upon the credit rating on the already-outstanding series of the above-mentioned debt instrument.

DBRS Morningstar confirmed the Issuer Rating on Corporación Acciona Energías Renovables S.A. (CAER) and the credit rating on Acciona Energía FF’s Euro Medium Term Notes at BBB (high) with a Stable trend on 26 July 2023. The credit rating on Acciona Energía FF’s Euro Medium Term Notes is largely based on the credit rating on CAER, which is the guarantor of the EMTN programme. The current credit ratings are supported by CAER’s (1) stable cash flows from regulated generation assets in Spain; (2) long-term contracts for its international generation assets; (3) good geographic diversification; (4) solid credit metrics, strong liquidity, and good capital management policy; and (5) strong operational expertise and a good track record in the development of power projects. Acciona Energía FF’s ratings are constrained by CAER’s (1) capital expenditure intensity and project development risk, (2) exposure of nonregulated generation to price volatility in the long term, (3) operational risk, (4) currency and interest risk, and (5) intense competition in nonregulated operations.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
Environmental (E) Factors
As CAER is a pure-play leader in the renewable energy sector, DBRS Morningstar considers the Environmental factor “Carbon and GHG Costs” to have a relevant effect on the credit rating, with a modestly positive impact on DBRS Morningstar’s overlay analysis.

Credit rating actions on CAER are likely to have an impact on this credit rating.

There were no Social or Governance factors that had a significant or relevant effect on the credit analysis.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings https://www.dbrsmorningstar.com/research/416784 (4 July 2023).

Notes:
All figures are in euro unless otherwise noted.

DBRS Morningstar applied the following principal methodologies:
-- Global Methodology for Rating Companies in the Independent Power Producer Industry (9 May 2023), https://www.dbrsmorningstar.com/research/413646.
-- Global Methodology for Rating Companies in the Regulated Electric, Natural Gas, and Water Utilities Industry (27 September 2023), https://www.dbrsmorningstar.com/research/421106.

The following methodologies have also been applied:
-- DBRS Morningstar Global Criteria: Guarantees and Other Forms of Support (28 March 2023), https://www.dbrsmorningstar.com/research/411694.
-- DBRS Morningstar Global Criteria: Rating Corporate Holding Companies and Parent/Subsidiary Rating Relationships (27 September 2023), https://www.dbrsmorningstar.com/research/421119.

The credit rating methodologies used in the analysis of this transaction can be found at: https://www.dbrsmorningstar.com/about/methodologies.

A description of how DBRS Morningstar analyses corporate finance transactions and how the methodologies are collectively applied can be found at: https://www.dbrsmorningstar.com/research/397223.

The primary sources of information used for this credit rating includes audited financial statements, quarterly results reports, management projections and budgets, and external correspondences. DBRS Morningstar considers the information available to it for the purposes of providing this credit rating to be of satisfactory quality.

DBRS Morningstar does not audit the information it receives in connection with the credit rating process, and it does not and cannot independently verify that information in every instance.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar trends and credit ratings are under regular surveillance.

For further information on DBRS Morningstar historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: https://registers.esma.europa.eu/cerep-publication. For further information on DBRS Morningstar historical default rates published by the Financial Conduct Authority (FCA) in a central repository, see https://data.fca.org.uk/#/ceres/craStats.

This credit rating is endorsed by DBRS Ratings Limited for use in the United Kingdom.

Lead Analyst: Giuseppe Fresta, Senior Vice President
Rating Committee Chair: Victor Vallance, Managing Director
Initial Rating Date: 3 September 2021
Last Rating Date: 26 July 2023

Information regarding DBRS Morningstar credit ratings, including definitions, policies, and methodologies, is available on www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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