Isolux Corsan bonds whipsaw after report of solar debt troubles
By Robert Smith
LONDON, May 14 (IFR) - Isolux Corsan's bonds plunged on Thursday after an article alleged it is renegotiating debt at its solar division, although prices have started to recover after the Spanish firm said the piece contained "various errors".
The price action comes in a market jittery about idiosyncratic risks at Spanish concession firms after high profile stories knocked peers such as Abengoa and OHL.
Spanish online newspaper El Confidencial published a story on Thursday morning stating that Isolux has hired Rothschild to renegotiate T-Solar's 1bn-plus debt pile, stating that some of the loans cannot cope with Spain's new electricity regulations.
This was enough to send Isolux's 850m 6.625% 2021 notes tumbling more than three points from 84.5 to 81, according to Tradeweb prices.
"Isolux had investor meetings earlier this week and no one asked any questions about T-Solar," said one investor. "Some people are already saying the story is nonsense, but you've seen a big fall as it's caught people off guard and there's such an intolerance for risk in this sector."
Shortly before 1130 BST, Isolux put out a statement explaining that T-Solar is in the process of refinancing its project finance facilities, but that this is "standard practice in the industry" after changes to Spain's renewable energy regime.
The Spanish government poured subsidies into the solar energy market ahead of the financial crisis, but has cut back tariff levels in recent years in an effort to curb spending.
The statement also stresses that there are "no guarantees to project finance" by Isolux Corsan, and that these loans are backed only by the solar plants themselves. Continuación...