S&P affirms Talca-Chillan

Standard & Poor's said it affirmed the AAA long-term insured senior secured debt rating on the wrapped fixed-rate notes issued by Chile-based Talca-Chillan Sociedad Concesionaria SA following receipt of final documentation. S&P's BBB underlying rating (SPUR) on the issue is also affirmed.

The outlook is stable.

The notes were issued in 5.6 million Chilean inflation-protected units, with final maturity in 2019, and have the unconditional and irrevocable guarantee of payment of scheduled interest and principal on the notes provided by MBIA Insurance Corp. (AAA/stable).

The BBB underlying rating reflects the a lack of guarantee the timing of cash inflows by MBIA, a new financial strategy leveraging toward third-party debt, a dependence of cash flow growth on continued GDP growth in the region and the notes' structure, which is complex due to failure of the prior financing (due to lower-than-expected traffic), the agency said.

Offsetting these risks are following strengths: MDI significantly increases the recovery value by allowing the concession to extend until certain net present value is achieved and no dividend payment can be made until all the senior debt has been paid, protecting project cash flows in favor of creditors, the agency said.

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