Renta 4 | S&P Global has reiterated Iberdrola’s rating at ‘BBB+/A-2’, with a stable outlook, following the purchase of 30.29% of Neoenergia from Previ for €1.88 billion.
The agency highlights that the transaction will reduce cash outflow in the Brazilian subsidiary and strengthen cash flow concentration, as will the integration of Avangrid in the United States from December 2024, which they consider positive for credit.
Despite Neoenergia’s strategic importance, the agency warns of increased regulatory and country risks in Brazil, as well as the subsidiary’s higher leverage (10% FFO/debt in 2025 compared to 21% for the group). Neoenergia maintains a ‘BB’ rating, below that of Iberdrola.
Assessment: Neutral news. The rating remains unchanged. The transaction strengthens the group’s cash flow and structure, although regulatory and country risk in Brazil limits a more positive impact.
We reiterate our hold recommendation, with a target price of €16.60/share.
