Fitch Updates Rating Criteria for Infrastructure and Project Finance.LONDON & NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of & SINGAPORE -- 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 today released its new 'Rating Criteria for Infrastructure and Project Finance'. This criteria report describes the analytical framework used by Fitch analysts when assigning or monitoring ratings for debt instruments where repayment is dependent upon cash flows from the construction, operation and, in some cases, handover n. 1. The act of relinquishing property or authority etc. to another; as, the handover of occupied territory to the original posssessors; the handover of power from the military back to the civilian authorities s>. of a standalone stand·a·lone adj. Self-contained and usually independently operating: a standalone computer terminal. project, which may encompass several assets. The release of these criteria does not change the essential methodology used by Fitch, but provides a more detailed and transparent description of the risk factors and risk metrics considered in the analysis. This criteria report consolidates analytical developments and broadens the range of factors addressed but its introduction is not anticipated to result in any rating actions. It replaces in particular the document 'Rating Approach to Project Finance', dated 12 August 2004. Fitch's analysis firstly addresses the potential of the project to generate stable cash flow based on its legal framework and fundamental economics together with any political or macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. risks. This project analysis considers factors such as project rationale, the sponsor and legal structure, completion risk, technology risk, operating and maintenance risk plus risks to project gross revenue from volume, price or availability. Sovereign, political and industry risks are also considered here together with future capital expenditure and information quality. The agency then considers the financial structure to form an opinion on the capacity of those cash flows to service the rated debt instruments in accordance with their terms. This financial analysis addresses the debt structure, including priorities, amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2. , maturity, interest risk and associated hedging. The provision of liquidity, reserves, financial covenants and triggers are considered in the context of the project. Where applicable, counterparty risk Counterparty Risk The risk to each party of a contract that the counterparty will not live up to their contractual obligations. Notes: In most financial contracts, counterparty risk is known as default risk. , handover, 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. or termination risks are also considered. Stress scenarios (single or combined factor) are used as part of the financial analysis to test the cash flow sensitivity of the rated debt instruments against a range of possible outcomes for key rating drivers. In this report Fitch has introduced ranked credit attributes for qualitative analytical factors. The rankings are indicative of Fitch's analytical views of selected credit attributes from a wide range of project types and provide qualitative guidance in assessing the attributes present in a project. They are only a part of the rating process: however, investment-grade ratings are typically associated with projects, structures and instruments displaying predominantly stronger or mid-range attributes described in the report. When applicable, peer analysis will also be used in the rating analysis. This criteria report is used in conjunction with any relevant project sector or asset class specific criteria, published at www.fitchratings.com. Sector- or asset-specific criteria may provide indicative metrics and stress levels, additional factors, attribute expectations or specific methodologies. 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. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP HTTP in full HyperText Transfer Protocol Standard application-level protocol used for exchanging files on the World Wide Web. HTTP runs on top of the TCP/IP protocol. ://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 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 ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion