• Credit downgrade of Abengoa `has no impact' on yieldco unit
  • Abengoa Yield taking `sufficient separateness provisions'

Abengoa Yield Plc, the U.S.-traded holding company formed by Spain’s Abengoa SA, has taken “sufficient separateness provisions” to insulate itself from the potential bankruptcy of its founder, Moody’s Corp. said in a report Friday.

Abengoa has reduced its ownership of the holding company to 42 percent -- it owned 47 percent as recently as November -- and five of Abengoa Yield’s eight board seats are now held by independent directors, including the chairman, Moody’s analyst Natividad Martel said in the report.

Abengoa Yield, which is also in the process of renaming itself, “has made significant progress towards achieving full autonomy,” including separating its back-office and information technology systems, Martel said. As a result, Moody’s said its downgrade March 2 of Abengoa’s credit rating has “no impact” on the yieldco.

Rebranding

Abengoa requested preliminary bankruptcy protection in November and has until March 28 to reach an agreement with creditors to restructure its debt. If it fails, it will proceed into court-led insolvency proceedings. Abengoa Yield has attempted to distance itself, including rebranding itself as Atlantica Yield.

“We want to reinforce our autonomy from Abengoa, to become a completely independent company,” Javier Garoz, Abengoa Yield’s then-chief executive officer, said on a Nov. 6 earnings call.

Abengoa Yield is also negotiating with lenders regarding four solar projects it owns, Martel said. The projects’ financing arrangements include so-called cross default clauses, so if Abengoa defaults, the solar farms may also default.

“If un-remedied, the clauses could prevent project-level distributions from being paid to Abengoa Yield,” Martel wrote. Abengoa Yield said in December it was seeking waivers to eliminate these clauses.

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