OREANDA-NEWS. S&P Global Ratings Services affirmed its 'BBB-' corporate credit rating on ISAGEN, S. A. E. S.P. The outlook remains stable.

The rating affirmation reflects our expectation that the company's operating and financial metrics will continue to be in line with our projections in the next couple of years.

The stable outlook reflects our expectation that the company will maintain its conservative strategy to offset hydrology risk, with 80% contracted capacity in 2016, and our expectation that it will post FFO to debt of 20%-25% and debt to EBITDA of 2.5x-3.0x, while maintaining FFO interest coverage of 3.0x in the next 12-24 months.

The rating could be at risk if we were to expect a significant deterioration in the company's financial risk profile due to, for example, a more aggressive commercial strategy, worse hydrology conditions, and/or a major acquisition, leading to a debt to EBITDA ratio above 4.0x and FFO to debt below 20%.Under this scenario, we could revise our financial risk profile to aggressive from significant, and all else remaining equal, potentially downgrade the company to 'BB+'.

We could raise the ratings, if there is a significant improvement in the company's cash generation, from increased EBITDA margins or a liability management enables it to reduce the cost of debt, resulting in higher FFO. In this scenario, we would expect to see debt to EBITDA below 3.0x and FFO to debt above 30% to consider the upgrade.