CAPEX's US$150M Sr Fixed-Rt Nts Asgnd BB Rtg by S&P.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 6/9/98-- Standard & Poor's today assigned its double-'B' rating to CAPEX S.A.'s US$150 million senior fixed-rate notes with a seven-year bullet maturity. Note proceeds will be primarily used to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. the company's outstanding financial debt. CAPEX's primary business is the generation of electricity in the south of Argentina. CAPEX's generating facility, a thermal plant with 6 six units aggregating an installed capacity of 371MW, represents 2.0% of total installed capacity within Argentina. CAPEX's rating reflects the risks inherent in the Argentine Argentine having some relationship with the country Argentina. Argentine tick margaropuswinthemi. Argentine tortoise geochelonechilensis. generation market, where generators must compete based on marginal costs Marginal cost The increase or decrease in a firm's total cost of production as a result of changing production by one unit. marginal cost The additional cost needed to produce or purchase one more unit of a good or service. to be dispatched Dispatched was a Swedish melodic death metal band formed in 1992 by Daniel Lundberg. Their sound is very similar to the older Gothenburg style of early In Flames. Biography Dispatched was formed just before New Year's Eve of 1991 by Daniel Lundberg and Krister Andersson. . Other risks faced by CAPEX include: -- Transmission bottlenecks between its geographic region (Comahue) and the main load center of Buenos Aires Buenos Aires (bwā`nəs ī`rēz, âr`ēz, Span. bwā`nōs ī`rās), city and federal district (1991 pop. , -- A continuing decline in electricity prices in the wholesale market, and -- An aggressive construction program However, these risks are offset by strengths such as: -- A competitive advantage due to vertical integration, -- A solid operating track record, and -- The projected construction of a new transmission line between the Comahue and Buenos Aires regions, which will help alleviate the bottleneck A lessening of throughput. It often refers to networks that are overloaded, which is caused by the inability of the hardware and transmission lines to support the traffic. It can also refer to a mismatch inside the computer where slower-speed peripheral buses and devices prevent the CPU . CAPEX is one of the lowest-cost thermal operators in the system, a fact that ensures a high level of dispatch into the system. This results from gas supplied to the plant from its own gas reserves. CAPEXys ownership of gas reserves is a major strength. While CAPEX's financials are currently adequate, they are expected to deteriorate de·te·ri·o·rate v. 1. To grow worse in function or condition. 2. To weaken or disintegrate. during the construction period due to the fact that the different projects will be largely debt-financed. The company's weakest financial point is expected to take place at year-end 1999 before the start-up of the new combined cycle A combined cycle is characteristic of a power producing engine or plant that employs more than one thermodynamic cycle. Heat engines are only able to use a portion of the energy their fuel generates (usually less than 50%). The remaining heat from combustion is generally wasted. plant. However, financial performance is anticipated to recover to pre-1997 levels as cash flow from the start-up of the combined cycle comes on line. OUTLOOK: STABLE Standard & Poor's expects management to be flexible in its dividend policy to accommodate any higher-than-expected spending needs. New projects are expected to be funded via nonrecourse project finance or possible additional equity offerings. CAPEX's financial profile is expected to improve with the completion of various current projects, Standard & Poor's said. -- CreditWire
CONTACT: Frederick Haddad, New York 212/208-8385
Sergio Fuentes, Buenos Aires (54) 1-326-5686
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