Fitch Affirms 'A-' Rating of Transelec Following Capital Reduction.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the 'A-' rating assigned to HQI HQI Habitat Quality Index HQI Housing Quality Indicator Transelec Chile S.A.'s (Transelec) US$465 million senior unsecured notes. Fitch has also affirmed Transelec's 'A-' foreign and local currency ratings and the 'AA(chl)' national scale rating. The affirmation follows the announcement by the company that they have decided to reduce their capital by US$70 million. The Rating Outlook for all these ratings remains Stable. The rating decision reflects that company's credit profile is solid for the rating categories and cash balances have been higher than anticipated since the company did not win its bid for the construction of a new US$60 million Charrua-Cautin transmission line earlier in 2005, as had been projected and previously considered by Fitch. The use of these funds as repayment of capital and the none construction of the previously mention line have not materially altered the company's credit profile. As of June 30, 2005 Transelec had US$114 million in cash and US$627 million in equity. Following the capital reduction, cash balances will still remain over US$40 million. The stock buy back will increase the leverage ratio to 60% from 57% as of June 2005. Credit protection measures are expected to improve over the next couple of years as revenues from internally funded expansion projects come on line and reflecting anticipated debt reduction of US$40 million in 2006 from financial transactions already executed. Revenue and cash flow are expected to increase further by 2007 reflecting the addition of eight trunk-line upgrade projects (approximately US$79 million investment) which are being financed with cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses . Capital expenditures are expected to be relatively low in 2005 and increase in 2006 and 2007, when the eight projects are expected to be constructed. 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 89%-owned by Hydro-Quebec International Transmision Sudamerica S Sudamerica, literally "South America" in Spanish, is a genus of mammal from the extinct suborder Gondwanatheria that lived in Patagonia, South America during the Paleocene, just after the end of the "Age of Dinosaurs". .A., a subsidiary of Hydro-Quebec (HQ), and 11%-owned by 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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