Enel in the spotlight, S&P confirms rating and improves outlook to 'positive'
The rating agency predicts that 'the group's repositioning towards European networks, and the increased share of regulated profits, will reduce cash flow volatility and business risk'
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(Il Sole 24 Ore Radiocor) - Positive session for Enel on the FTSE MIB , after S&P Global Ratings upgraded the energy group's outlook to "positive" from "stable", confirming its long-term debt rating at "BBB" and its short-term debt rating at "A-2".
The rating agency pointed out that Enel has expanded business in the Italian and Spanish networks to around 40% of adjusted funds from operations (Ffo) in 2024. S&P predicts that Enel will "continue to invest in European grids, accounting for around 50% of the 43 billion euro of capital expenditure (capex) planned for the period 2025-2027" and that "the group's repositioning towards European grids, and increased share of regulated earnings, will reduce cash flow volatility and business risk". According to S&P, if the group carries out its plan, an increase in adjusted debt of around EUR 8 billion over the period 2025-2027 is possible, thanks to high net investments (around EUR 11.3 billion per year) and aggressive shareholder remuneration (with total dividends expected to average EUR 6.3 billion per year). However, earnings growth, driven by growth in networks and renewables, could allow Enel's adjusted FFO to continue to grow. Moreover, the company is also preparing to return to the debt market in 2026.
In fact, the board of directors of Enel, which met on the eve of the meeting, approved the issue, by 31 December 2026, of one or more non-convertible bonds, in the form of hybrid subordinated securities, also of a perpetual nature, for a maximum total amount of 2 billion euro, to be placed also through private placements. In the group's intentions, the new loans will be used to refinance Enel's outstanding hybrid bonds and further strengthen the company's capital and financial structure. The board of directors also delegated to the CEO the task of deciding on the issuance of the new bonds and setting the timing, amount, currency, interest rate and further terms and conditions for each one, as well as the manner of placement and possible listing on regulated markets or multilateral trading facilities, based on market conditions.
