Fitch Ratings Affirms 'BBB-' Rating of Fortuna's Senior Notes.Business Editors CHICAGO--(BUSINESS WIRE)--Oct. 3, 2003 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 the 'BBB-' rating of the senior notes issued by Empresa de Generacion Electrica Fortuna S Fortuna (fôrt  `nə), in Roman religion, goddess of fortune. Worshiped under several forms, she appears to have originally been a goddess of fertility. .A. (Fortuna). Fitch has concurrently affirmed the local and foreign currency ratings of Fortuna at 'BBB-'. The assigned rating reflects Fortuna's position as the largest hydroelectric plant in Panama, its competitive dispatch position supported by a large storage reservoir, a sound operating strategy to optimize contract electricity sales, its acceptable projected debt service coverage under various stress scenarios and a lack of foreign-exchange risk Foreign-Exchange Risk 1. The risk of an investment's value changing due to changes in currency exchange rates. 2. The risk that an investor will have to close out a long or short position in a foreign currency at a loss due to an adverse movements in exchange rates. . The rating also considers potential weaknesses, including exposure to hydrology hydrology, study of water and its properties, including its distribution and movement in and through the land areas of the earth. The hydrologic cycle consists of the passage of water from the oceans into the atmosphere by evaporation and transpiration (or , commodity price risks, a relatively new regulatory framework and ongoing competitive price pressures. Fortuna's credit-protection measures are consistent with the assigned rating. The company has low leverage with debt-to-capital of 34% and debt-to-EBITDA of 2.8 times (x), which compare favorably to industry averages. Through June 2003, Fortuna reported EBITDA-to-interest of 3.5x. The rating of Fortuna is not constrained by the sovereign rating of Panama as access to foreign exchange-a key determinant of external creditworthiness-is not limited by finite foreign exchange reserves Foreign exchange reserves (also called Forex reserves) in a strict sense are only the foreign currency deposits held by central banks and monetary authorities. or exchange controls. Panama's track record of using the U.S. dollar and allowing private sector debt repayment during periods of sovereign default allows entities in Panama to be rated above the 'BB+' sovereign rating, based on the underlying corporate credit rating of the entity. The sovereign rating of Panama remains on a Negative Rating Outlook. However, any potential sovereign rating change would not be expected to result in an immediate change in the rating of Fortuna. Fortuna is a hydroelectric generating company located in the western portion of Panama. The company has an installed capacity of 300MW and generated 1,963GWh in 2002. Fortuna is 49% owned by Americas Generation Corp. (AGC AGC Automatic Gain Control AGC Automotive Glass Cartridge (fuse) AGC Associated General Contractors AGC Associated General Contractors of America AGC Atypical Glandular Cells AGC Attorney-General's Chambers ), which is indirectly owned by Hydro-Quebec (50.1%) and El Paso El Paso (ĕl pă`sō), city (1990 pop. 515,342), seat of El Paso co., extreme W Tex., on the Rio Grande opposite Juárez, Mex.; inc. 1873. Corporation (49.9%). To view or download a copy of Fitch's new report on Fortuna, log on to the FitchResearch section of Fitch's web site, 'www.fitchratings.com' or contact market services at 1-800-853-4824. |
|
Printer friendly
Cite/link
Email
Feedback
Reader Opinion