CHICAGO--(BUSINESS WIRE)--Fitch Ratings has upgraded the ratings assigned to the notes issued by Taboada Finance Limited, a special purpose company incorporated in the Cayman Islands:
--Series 2011-1 S/. 572,089,000 notes due 2029 to 'BBB+' from 'BBB';
--Series
2011-2 S/. 220,250,000 notes due 2033 to 'BBB+' from 'BBB';
--Series
2011-3 up to S/. 150,000,000 notes to 'BBB+' from 'BBB'.
The Rating Outlook remains Stable.
The underlying issuance is a securitization of rights to receive future payments from Servicio de Agua Potable y Alcantarillado de Lima (SEDAPAL), the Peruvian state-owned water utility company for the districts of Lima and Callao. Payment rights, in the form of retribucion por inversiones (RPIs), are related to the construction of Planta de Tratamiento de Aguas Residuales Taboada (Taboada), a wastewater treatment plant by ACS Servicios, Comunicaciones y Energia S.L. (ACS). ACS is the primary sponsor of the transaction through its local concessionaire, Planta de Tratamiento de Aguas Residuales Taboada S.A. (PTAR Taboada). Repayment of the notes is supported by a contingent guarantee of the government of Peru (GOP) through the Ministry of Housing, Construction and Sanitation (MVCS) to provide for any debt service shortfalls.
KEY RATING DRIVERS
The upgrade of the notes reflects Fitch's recent
upgrade of Peru's local currency (LC) Issuer Default Rating (IDR) to
'A-' from 'BBB+' with a Stable Outlook. The rating of the notes is tied
to the strength of the sovereign's contingent guarantee of RPICAO
payments if water utility bill payments to SEDAPAL do not sufficiently
cover debt service. In Fitch's view, SEDAPAL's ability to issue more
debt from its master trust and use more assigned flows heightens the
transaction's reliance on the sovereign guarantee.
In addition, Fitch views the recent extension of the third construction phase and related five-month delay on the monetization of the last RPICAOs as credit neutral given the faster than expected monetization of the RPICAOs related to phases I & II as well as the lower than expected observed inflation, among other considerations. Therefore, the upgrade to Peru's LC IDR drives the upgrade to the ratings of the notes.
RATING SENSITIVITIES
The ratings are sensitive to further changes
in Peru's LC IDR and to a lesser extent, the performance risk of
SEDAPAL. While the rating of the transaction will be sensitive to
downgrades of the LC IDR assigned to Peru, an upgrade to the LC IDR will
not automatically lead to an upgrade of the transaction rating. In
addition, severe reductions in coverage levels or an increase in debt
levels could also result in rating downgrades.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured
Finance Rating Criteria' (May 24, 2013);
--'Future Flow
Securitization Rating Criteria' (June 18, 2013);
--'Peru' (Oct. 28,
2013).
Applicable Criteria and Related Research:
Global Structured Finance
Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
Future
Flow Securitization Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=711077
Peru
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=721742
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=807955
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