Leverage Rising at Panama Generators: Fitch

Fitch has put the BBB minus ratings of Panama electricity generation companies AES and Enel Fortuna on rating watch negative because it believes the government’s initiative to lower electricity prices in the country will materially increase the companies’ leverage. Fitch’s initial estimates are that AES and Fortuna’s historical Ebitda generation will decrease by no less than 30% and 33%, respectively. These reductions are in line with the Panamanian president’s intention to lower electricity prices by 30% throughout the country, it says.