S&P Rates Transener $150M Bank Loan Facilities BBB-.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 8/17/98--Standard & Poor's today assigned its triple-'B'-minus rating to Compania de Transporte de Energia Electrica de Alta Tension S.A.'s (Transener) upcoming $50 million trade facility and $100 million medium-term loan facility. Proceeds will be applied to finance the construction of the fourth transmission line between the Comahue and Buenos Aires Buenos Aires (bwā`nəs ī`rēz, âr`ēz, Span. bwā`nōs ī`rās), city and federal district (1991 pop. regions. The ratings reflect the company's exclusive 95-year concession to operate approximately 95% of Argentina's existing high-tension transmission lines. The company also benefits from Argentina's favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. long-term electric consumption prospects. However, the rating is constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. by the significant increase in debt used to finance the company's Transba S.A. acquisition and the construction of the above mentioned transmission line. The rating also incorporates the uncertainties regarding the transmission tariff review slated for 1998, which has not been defined by the regulatory body, and the challenges inherent in operating in the Argentine environment. In 1992, the Argentine government created Transener to privatize pri·va·tize tr.v. pri·va·tized, pri·va·tiz·ing, pri·va·tiz·es To change (an industry or business, for example) from governmental or public ownership or control to private enterprise: "The strike ... the transmission network previously owned by three state-owned enterprises. The transmission assets were considered to be in good operating condition relative to other privatized electric utility assets. The company is now 65% owned by Citelec S.A., with the Argentine government and Transener employees retaining the residual 25% and 10% interests, respectively. Citelec is owned in equal 41.25% shares by subsidiaries of the U.K.'s National Grid national grid Noun Brit & NZ 1. a network of high-voltage power lines linking major electric power stations 2. the arrangement of vertical and horizontal lines on an ordnance survey map Co. PLC (double-'A'-plus/Stable/'A-1'-plus) and Argentina's Perez Companc Perez Companc could refer to
As a result of the increased debt to finance these investments, Transener's financial profile is expected to deteriorate de·te·ri·o·rate v. 1. To grow worse in function or condition. 2. To weaken or disintegrate. over the near term. Funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. to total debt and funds from operations interest coverage is expected to decline to about 15% and under 3.0 times (x) by 2000, respectively, from 44.2% and 5.3x in 1997. The company's financial profile is expected to improve following the start-up of the new transmission line. OUTLOOK: STABLE The current rating does not envision a tariff review in 1998 that would significantly impair im·pair tr.v. im·paired, im·pair·ing, im·pairs To cause to diminish, as in strength, value, or quality: an injury that impaired my hearing; a severe storm impairing communications. Transener's financial profile and assumes no additional debt by the company in the near-to-medium term. The rating does assume dividend policy flexibility in response to higher-than-projected spending needs, Standard & Poor's said.---CreditWire
CONTACT: Sergio Fuentes, Buenos Aires (54) 1-326-5686
Cheryl E Richer, New York (1) 212-208-1877
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