FI­NANCE Fitch rates Virid­ian bonds BB-

Irish Independent - Business Week - - BUSINESSWEEK -

RAT­INGS agency Fitch has cat­e­gorised Virid­ian’s €600m-worth of se­nior se­cured bonds as BB-, two notches be­low in­vest­ment grade credit.

The Belfast-based en­ergy provider launched the bond sale ear­lier this week as it moved to take ad­van­tage of ultra-cheap bor­row­ing costs by re­deem­ing €540m of ex­ist­ing pa­per and re­plac­ing it with cheaper notes de­nom­i­nated in ster­ling and euro.

Virid­ian – the owner of elec­tric­ity and gas sup­pli­ers, En­er­gia and Power NI – pro­vides en­ergy to close to 720,000 cus­tomers, ac­cord­ing to its an­nual re­port. It was ac­quired in 2016 for €1bn by global in­fra­struc­ture in­vestor, I Squared.

In its rat­ing note Fitch high­lighted Virid­ian con­struc­tion of ad­di­tional wind farms will add 75mw of wind ca­pac­ity “within the next 18 months, tak­ing the [group’s] to­tal to 300mw and low­er­ing the build risk”. It also fore­cast an ex­pan­sion of the power com­pany’s div­i­dend stream in 2019 as re­cently ac­quired as­sets bol­ster rev­enue.

In the past year Virid­ian has em­barked on a buy­ing spree snap­ping up three com­pa­nies in the North with a to­tal of 64 megawatts of wind­farm as­sets un­der de­vel­op­ment for a com­bined £18m.

The group’s CEO, Ian Thom, raised the is­sue of its rel­a­tively ex­pen­sive debt on a call to an­a­lysts last month and noted rivals avail of fund­ing costs at be­low 4pc. Virid­ian’s ex­ist­ing bonds, is­sued in Fe­bru­ary 2015 carry a 7.5pc in­ter­est rate. Its new ster­ling­de­nom­i­nated notes are due to ma­ture in 2024 while the euro de­nom­i­nated pa­per ma­tures in 2025.

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