Frankfurt am Main, November 30, 2012 -- Moody's Investors Service has today changed to negative from stable the outlook on the B1 corporate family rating (CFR), probability of default rating (PDR) and senior unsecured debt instrument ratings of Abengoa S.A. and the senior unsecured debt instrument ratings of Abengoa Finance S.A.U.

Outlook Actions:

..Issuer: Abengoa Finance, S.A.U.

....Outlook, Changed To Negative From Stable

..Issuer: Abengoa S.A.

....Outlook, Changed To Negative From Stable

RATINGS RATIONALE

"The change of outlook to negative was prompted by our expectation that Abengoa's adjusted leverage will materially exceed 7.0x consolidated net debt/EBITDA through at least 2012, which is higher than we previously expected," says Kathrin Heitmann, Moody's lead analyst for Abengoa. Moody's notes that Abengoa had consolidated leverage of 8.5x as adjusted at 30 June 2012, and as reported gross corporate debt/EBITDA of 6.0x (3.4x on a net debt basis) at 30 September 2012. In the rating agency's view, a reduction in these levels will largely depend on the company's ability to release cash from working capital and to reduce net consolidated debt in the fourth quarter.

In Moody's view, Abengoa's current high consolidated leverage, including non-recourse debt, reduces the company's financial flexibility and increases its vulnerability to weakening economic conditions.

The negative outlook reflects the risk that Abengoa's currently weak credit metrics for the B1 rating category, as a result of the high gross debt leverage of its corporate as well as concession activities, might not improve sufficiently in 2013. Weaker prospects and profits for Abengoa's biofuels segment, the risk of higher-than-expected capital expenditure (capex) and persistent macroeconomic uncertainty more than offset the effect of the company's planned reduction in net recourse debt and continued growth in EBITDA in its concession activities.

Under its committed capex plan, Abengoa expects to invest approximately EUR3.0 billion on a consolidated basis in the period Q4 2012-2014. Abengoa will inject equity of EUR652million (22%) into these projects, with the remainder to be funded by committed project finance and equity contributions from partners. The clear majority will be spent on concentrated solar power plants, with the company's two solar projects in the USA alone accounting for more than half of the investment volume. Even if Abengoa's EBITDA continues to experience double-digit growth in percentage terms, the company's high capex is likely to push group (including the consolidated concessions) leverage net of cash well above 6.0x in the next 12-18 months. The high leverage nevertheless recognises the limited-recourse nature of more than half of Abengoa's debt and the contractual nature of cash flows from its concessions.

In addition, the negative outlook considers that Abengoa's liquidity profile could come under pressure if the company fails to secure access to capital markets and bank lending in the future. Abengoa faces corporate debt maturities of EUR520 million in 2013, EUR977 million in 2014 and EUR945 million in 2015 as per 30 September 2012. The company benefits from a large recourse cash balance of EUR2.25 billion at 30 September 2012; however, to a significant extent, this reflects the company's drawings under its syndicated loans, and is also fed by negative working capital driven by high advance payments.

The B1 CFR reflects (1) Abengoa's high leverage, both on a corporate and consolidated level; (2) the persistent weak macroeconomic environment affecting Spain, where the company is domiciled and generates approximately 29% of its revenues, and austerity measures implemented by the government; (3) the high proportion of the company's engineering and construction (E&C) projects that require significant equity contributions (55% of E&C revenues in 2011); (4) the company's need for continued regulatory support with regard to its innovation, solar energy generation or power transmission activities; (5) the company's exposure to emerging markets; and the (6) technical challenges the E&C segment faces to complete advanced installations on time and on budget.

However, more positively, the B1 CFR also reflects (1) Abengoa's consistent long-term trend track record of growth and profitability; (2) the diversity of its businesses, both in terms of industry and geography, with limited correlation; (3) the value embedded in its concession portfolio, funded with limited recourse and subject to active asset rotation, with Moody's expectation that the company would use proceeds to reduce net debt; and (4) management's strategy to enter into new concessions only once project finance (and partner equity) is firmly committed.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's would consider to downgrade Abengoa's ratings if the company's earnings strength were to deteriorate as a result of poor project execution or changes in the operating environment, such as reductions in regulatory support for renewable energies without a mitigating reduction in Abengoa's debt level.

More generally, a failure to reduce leverage would exert negative pressure on the ratings, such that (1) Abengoa's reported net corporate debt/EBITDA moves materially above 3.0x (September 2012: 3.4x) and its reported gross corporate debt/EBITDA fails to move below 5.5x in the intermediate term; (2) Moody's-adjusted net debt/EBITDA does not decrease comfortably below 7.0x (June 2012: 8.5x) for the group as a whole; or (3) the company's liquidity profile comes under increasing stress.

In the event of any of the above, Moody's would take account of the quality of Abengoa's investments, its financial strategy and the maturity of its concession portfolio.

Conversely, Moody's could upgrade the ratings if (1) Abengoa demonstrated resilience to economic pressures and cuts in regulatory support in its core markets; (2) Moody's-adjusted net debt/EBITDA fell below 6.0x for the group as a whole; and (3) the reported debt/EBITDA of Abengoa's corporate activities were sustained below 4.5x.

PRINCIPAL METHODOLOGY

The principal methodology used in rating Abengoa S.A. and Abengoa Finance S.A.U. was the Global Heavy Manufacturing Rating Methodology published in November 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Abengoa S.A. is a vertically integrated environment and energy group whose activities range from engineering & construction and utility-type operation (via concessions) of solar energy plants, electricity transmission networks and water treatment plants to industrial production activities such as biofuels and metal recycling. Headquartered in Seville, Spain, Abengoa generated EUR7.1 billion in revenues in 2011, of which 73% came from outside Spain.

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Kathrin Heitmann Analyst Corporate Finance Group Moody'sDeutschland GmbH An der Welle 5 Frankfurt am Main 60322 Germany JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Matthias Hellstern Managing Director Corporate Finance Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Releasing Office: Moody's Deutschland GmbH An der Welle 5 Frankfurt am Main 60322 Germany JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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