Fitch Affirms Autopistas del Nordeste (Cayman) Ltd 'B' Rating.NEW YORK -- Fitch Ratings affirms the 'B' rating on the 9.39% senior secured notes due 2026 of Autopistas del Nordeste (Cayman) Limited (AdN). The notes were issued to help fund the construction of the Santo Domingo-Samana toll road in the Dominican Republic (DR). The rating summarizes Fitch's opinions of the probability of default Probability of default (PD) is a parameter used in the calculation of economic capital or regulatory capital under Basel II for a banking institution. This is an attribute of bank's client. on timely payment of interest and ultimate payment of principal by the legal maturity date as well as the prospects for recovery in the event of default. Notably, Fitch's assessment of the likelihood of default is 'B-'; however, the rating on the notes also acknowledges the recovery prospects derived from the partial credit guarantee of the Multilateral Investment Guarantee Agency Multilateral Investment Guarantee Agency (MIGA), specialized agency of the United Nations. Formed in 1988, with headquarters in Washington, D.C., it is a member of the World Bank Group (see International Bank for Reconstruction and Development) and membership in the (MIGA See Multilateral Investment Guarantee Agency. ). The guarantee covers 51% of the face value of any loss attributable to transfer and convertibility, civil disturbance, and breach of contract events. To encourage construction of the Santo Domingo-Samana toll road, the government of the Dominican Republic (GDR GDR See Global Depositary Receipt (GDR). ) entered into a long-term concession with AdN under which the GDR is obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to provide funds denominated in dollars to AdN if toll revenue falls below a specified level -- the minimum revenue guarantee (MRG MRG Merge MRG Minority Rights Group International MRG Mad River Glen (Vermont) MRG Mouvement des Radicaux de Gauche (French: Left Radical Movement) MRG Manyetik Rezonans Görüntüleme ). Given the greenfield nature of the project Fitch attributes a high probability to the likelihood of AdN's reliance on the MRG to make debt service payments. On May 5, 2006, Fitch upgraded the long-term foreign currency rating of the Dominican Republic to 'B' from 'B-' and affirmed the 'B' rating on long-term local currency obligations. In Fitch's view, the obligation of the GDR to provide funds under the MRG, while denominated in U.S. dollars, is a contingent obligation and is on parity with payments required to be made to local contractors for services rather than on parity with long-term foreign currency obligations to international creditors. Given the MRG's position in the hierarchy of the GDR's obligations, the credit quality of the MRG is unaffected by the upgrade. The project consists of a 106-kilometer toll road connecting the Las Americas highway from Santo Domingo to the Rincon de Molinillos junction in Samana. The road is to be developed under a 33-year concession awarded by the GDR to a consortium of construction companies (Autopistas del Nordeste, C. por A.). 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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