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DCR Downgrades Hidroelectrica Piedra del Aguila S.A. to 'DD'.

CHICAGO, April 6 /PRNewswire/ -- Duff & Phelps Credit Rating Co. (DCR) has downgraded the securities of Hidroelectrica Piedra del Aguila S.A.'s (HPDA) to 'DD' (Double-D) from 'CCC' (Triple-C), Rating Watch--Uncertain. Approximately $200 million of debt is affected.

The downgrade is the result of the company's recent announcement that it intends to delay a $5.3 million interest payment due April 9, 1999, related to the company's US$100 million euro bond issuance due 2001. HPDA continues to work toward a comprehensive restructuring plan with bankers and bondholders and has called a bondholder's meeting scheduled for April 14, 1999.

HPDA has not made its US$19.8 million principal payment to Banco Nacion which was due March 31, 1999. The next scheduled maturity after the euro bond interest payment is US$94.6 million euro bond principal due May 28, 1999.

HPDA is an Argentine hydroelectric generating company located approximately 1,200 km southwest of Buenos Aires. The company supplies electricity primarily to the spot market in Argentina's National Interconnected System. PDA is a low marginal cost producer of electricity, which affords it high dispatch priority. PDA operates in a competitive generation market and sells 70 percent of its electricity in the spot market at market prices. The large percentage of spot market sales result in significant exposure to market price fluctuation, which adds to business risk. HPDA is pursuing a strategy to increase term contract sales to large users.

HPDA is 59 percent owned by a consortium including Gener S.A. (27 percent ownership, U.S.-dollar obligations rated 'A-' (Single-A-Minus); Transalta Energy Corporation (27 percent, unrated); and Duke Energy Corporation (17 percent owner, rated 'AA' (Double-A)).
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Publication:PR Newswire
Date:Apr 6, 1999
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