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Fitch rates AES Panama note BBB-
Fitch Ratings said it assigned BBB- foreign- and local-currency issuer default ratings to AES Panama SA and a preliminary BBB- rating to its proposed $300 million issuance of ten-year senior unsecured notes, which have a bullet amortization
The outlook is stable.
The proceeds of the notes will be used mainly to repay existing debt of the company - $271 million as of Sept. 30 - for financing costs and repayment premiums and for general corporate purposes. Fitch said the new bullet maturity transaction is expected to improve the debt service payments of the company and extend the final maturity, although the bullet amortization will increase refinancing risk at maturity.
The agency said the company's ratings are based on its strong portfolio of assets, competitive dispatch position, solid multiple power purchase agreements, adequate financial profile, healthy projected debt service coverage under various stress scenarios and the absence of foreign-exchange risk.
The ratings also incorporate potential weaknesses, including exposure to hydrology, commodity price risks, regulatory considerations and potential for long-term competitive price pressures, Fitch added.
The total-debt-to-EBITDA ratio was 3.7x for the first nine months of 2006.
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