Correction -- Fitch Places HQI Transelec on Rating Watch Negative.CHICAGO -- (This is an amended version a release sent out yesterday. The amount of total financial debt in the third paragraph has been updated.) Fitch has placed the following credit ratings of HQI Transelec S.A. (Transelec) on Rating Watch Negative: --Issuer Default Rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) 'A-' --US$465 million Senior Unsecured notes 'A-' --National Scale rating 'AA(chl)' The Rating Watch Negative (RWN) follows the announcement by Brookfield Asset Management  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . Inc. (Brookfield) that a consortium led by Brookfield, which includes Canada Pension Plan The Canada Pension Plan (CPP) is a contributory, earnings-related social insurance program. It forms one of the two major components of Canada's public retirement income system, the other component being Old Age Security (OAS). Investment board, British Columbia Investment Management Corporation and another institutional investor, has enter into a definitive agreement to acquire 92% of the shares of Transelec from Hydro-Quebec International Inc. for US$1.55 billion. Brookfield plans to fund the transaction, which is expected to be completed on July 5, 2006, with US$900 million of equity (61%) and US$600 million of debt (39%). Through March 31, 2006, Transelec reported a total financial debt of US$899 million, EBITDA-to-interest expense of 2.8 times (x), and debt-to-EBITDA ratio of 4.5x. The RWN reflects potential pressure on Transelec's credit quality due to this transaction. Should the debt the new shareholder will raise be pushed down to Transelec its debt to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become would increase to 7.6x on a pro-forma basis. Fitch does not anticipate any material changes in operations to result from this transaction. Transelec owns and operates most of the electricity transmission lines and substations of Chile's trunk transmission system in the Central Interconnected System (SIC), as well as a portion of the high-tension lines in the Northern Interconnected System (SING). Transelec is currently 89% owned by Hydro-Quebec International Transmision Sudamerica S.A., a subsidiary of Hydro-Quebec (HQ), and 11% owned by International Finance Corporation (IFC (Internet Foundation Classes) A class library from Netscape that provides an application framework and graphical user interface (GUI) routines for Java programmers. IFC was later made part of the Java Foundation Classes (JFC). See JFC, AFC and AWT. See also ICF. ). Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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