Fitch lowers rating of Europe's largest solar note

Oct 17, 2014 - Fitch Ratings Inc yesterday downgraded a bond issuance for solar projects in Europe by a SunPower Corp (NASDAQ:SPWR) project firm, due to the recent amendments to Italy’s renewable energy policies.

The US-based credit rating agency said in a statement it had lowered Andromeda Finance Srl’s class A2 notes to B from BB, giving them also a negative outlook. Fitch explained that its decision followed expectations for considerably weaker financial performance after the retroactive reductions to feed-in-tariff (FIT) levels in Italy. In August, the Italian Parliament and Senate approved a decree that reduces solar FiTs for operational plants of over 200 kW and changes the way payments are being made throughout the year.

Other factors that led to the downgrade include lower wholesale market prices and a revised market price forecast. The Negative outlook mirrors the overall operating and regulatory environment on the solar photovoltaic (PV) power market in the country.

Andromeda’s EUR-195.2-million (USD 249.6m) note issue in 2010 is touted as the largest one linked to solar schemes in all of Europe. Project company Andromeda PV Srl owns and runs two PV power stations in Montalto di Castro, Italy, with a combined capacity of 51.2 MW.

Also on the Thursday, Fitch affirmed its A- rating on Andromeda's class A1 notes and gave them a stable outlook.

(EUR 1.0 = USD 1.279)

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