05/02/13
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Fitch Revises Outlook on Dominican Republic Generation Cos to Stable; Affirms IDRs at 'B'
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Endorsement Policy 13 Dec 2012 2:34 PM (EST) Fitch Ratings-Chicago/Caracas-13 December 2012: Fitch Ratings has revised the Rating Outlooks on the Dominican Republic's generation companies' ratings to Stable from Positive. The agency has also affirmed the issuers' long-term foreign and local currency Issuer Default Ratings (IDRs) at 'B'. Please see below for a full list of rating actions. The revision of the Dominican Republic's sovereign Outlook to Stable from Positive reflects the deterioration in the sovereign's fiscal accounts; present external vulnerabilities; and the new government's challenges to reduce fiscal deficits and stabilize debt ratios in the context of budgetary rigidities, rising social demands and slower economic growth. The ratings of the Dominican Republic generation companies reflect the electricity sector's high dependency on transfers from the central government to service its financial obligations. The Dominican Republic's power sector is characterized by low collections from end-users and high electricity losses. Such conditions have kept distribution companies from effectively transferring cash to the country's generation companies, and the government subsidies have covered this gap during recent years. This dependence on government transfers links the credit quality of the distribution and generation companies in the country to that of the sovereign. Fitch has affirmed the following ratings, and revised Outlooks as indicated: AES Andres Dominicana SPV (Aes Dominicana) -- Foreign Currency IDR at 'B', Outlook to Stable from Positive; -- USD284 million notes due 2020 at 'B/RR4'. AES Andres B.V. -- National Long-term rating at 'A-(dom)', Outlook to Stable from Positive Empresa Generadora de Electricidad Itabo, S.A. -- Foreign Currency IDR at 'B', Outlook to Stable from Positive; -- Local Currency IDR at 'B', Outlook to Stable from Positive; -- National Long-term rating at 'A-(dom)'; Outlook to Stable from Positive -- Sr. unsecured notes due 2013 at 'A-(dom)'. Itabo Dominicana SPV -- Foreign Currency IDR at 'B', Outlook to Stable from Positive; -- USD284 million notes due 2020 at 'B/RR4'. Empresa Generadora de Electricidad Haina, S.A. -- Foreign Currency IDR at 'B', Outlook to Stable from Positive; -- Local Currency IDR at 'B', Outlook to Stable from Positive; -- National Long-term rating at 'A-(dom)'; Outlook to Stable from Positive -- USD175 million notes due 2017 at 'B/RR4'; -- Sr. unsecured notes due 2012 and 2016 at 'A-(dom)'. Contact: Primary Analyst Lucas Aristizabal Director +1-312-368-3260 70 West Madison St. Chicago, IL 60602 Secondary Analyst Julio Ugueto Associate Director +1-58212-286-3232 Fitch, Inc. Edf. Mene Grande II, #23 Av. Francisco de Miranda
www.fitchratings.com/creditdesk/press_releases/detail.cfm?pr_id=777219
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