DBRS Morningstar Places All Ratings of Acciona, S.A and Acciona Financiacion Filiales, S.A Under Review with Developing Implications

DBRS Ratings GmbH (DBRS Morningstar) placed the following ratings Under Review with Developing Implications:

1. Issuer Rating of Acciona, S.A.: BBB
2. Short-Term Issuer Rating of Acciona, S.A.: R-2 (Middle)
3. Rating of Acciona Financiación Filiales, S.A (AFF)’s Euro Medium Term Notes Programme: BBB (Guaranteed by Acciona, S.A.)

DBRS Morningstar’s rating action follows Acciona, S.A.’s (Acciona or the Company) announcement that the Company has initiated the process for an Initial Public Offering (IPO) relating to the shares of its subsidiary, Corporación Acciona Energías Renovables, S.L. (Energy Renewables or the New Opco). The IPO is subject to regulatory approvals and the approvals of relevant management bodies of Acciona. The timeline as to when the IPO is completed remains uncertain but it is expected to close in 2021.

The rating action reflects the limited information provided by Acciona’s management at this stage and uncertainties associated with the new structure of Acciona post-IPO. DBRS Morningstar will resolve the Under Review status when the following information is confirmed: (1) the percentage of Acciona’s ownership of the New Opco; (2) the financing strategy and leverage target at Acciona post-IPO; and (3) the amount of potential debt that will be transferred to or issued by the New Opco.

DBRS Morningstar will confirm the ratings of Acciona and AFF if: (1) Acciona retains a substantial ownership of the New Opco such that post-IPO EBITDA or cash flow contributions from the New Opco are at least 60% of Acciona’s total consolidated EBITDA or cash flow; (2) credit metrics at Acciona remain solid and continue to support the BBB ratings; and (3) there is no material debt transferred to or issued by the New Opco or, in the event that a material amount of debt is transferred to or issued by the New Opco, the appropriate structural risk mitigating actions are undertaken by Acciona. If any of the above conditions are not met, DBRS Morningstar may take a negative rating action on Acciona and AFF.

For more information regarding Acciona, S.A.’s ratings, please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/359962

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

Notes:
All figures are in euros unless otherwise noted.

The principal applicable methodologies are: Rating Companies in the Independent Power Producer Industry (19 May 2020); Rating Companies in the Regulated Electric, Natural Gas, and Water Utilities Industry (27 October 2020); Rating Companies in the Construction and Property Development Industry (20 November 2020); DBRS Morningstar Criteria: Rating Corporate Holding Companies and Parent/Subsidiary Rating Relationships (2 November 2020); and DBRS Morningstar Criteria: Guarantees and Other Forms of Support (14 January 2021). These can be found can be found at: http://www.dbrsmorningstar.com/about/methodologies.

DBRS Morningstar does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance.

These ratings are under review. Generally, the conditions that lead to the assignment of reviews are resolved within a 90-day period. DBRS Morningstar reviews and ratings are under regular surveillance.

For further information on DBRS Morningstar historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. DBRS Morningstar understands further information on DBRS Morningstar historical default rates may be published by the Financial Conduct Authority (FCA) on its webpage: https://www.fca.org.uk/firms/credit-rating-agencies.

These ratings are endorsed by DBRS Ratings Limited for use in the United Kingdom.

Lead Analyst: Giuseppe Fresta, Vice President
Rating Committee Chair: Andrew Lin, Managing Director
Initial Rating Date: 25 May 2020
Last Rating Date: Not applicable as there is no last rating date.

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-- Rating Companies in the Independent Power Producer Industry (19 May 2020): https://www.dbrsmorningstar.com/research/361185/rating-companies-in-the-independent-power-producer-industry.
-- Rating Companies in the Regulated Electric, Natural Gas, and Water Utilities Industry (27 October 2020): https://www.dbrsmorningstar.com/research/353795/rating-companies-in-the-construction-and-property-development-industry.
-- Rating Companies in the Construction and Property Development Industry (20 November 2020): https://www.dbrsmorningstar.com/research/353795/rating-companies-in-the-construction-and-property-development-industry.
-- DBRS Morningstar Criteria: Rating Corporate Holding Companies and Parent/Subsidiary Rating Relationships (2 November 2020):
https://www.dbrsmorningstar.com/research/353260/dbrs-morningstar-criteria-rating-corporate-holding-companies-and-parentsubsidiary-rating-relationships.
-- DBRS Morningstar Criteria: Guarantees and Other Forms of Support (14 January 2021):
https://www.dbrsmorningstar.com/research/355780/dbrs-morningstar-criteria-guarantees-and-other-forms-of-support.

Information regarding DBRS Morningstar ratings, including definitions, policies, and methodologies, is available on www.dbrsmorningstar.com.