Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

MOODY'S CONFIRMS RATINGS ON ALL PDVSA VENEZUELAN PROJECTS

01 Feb 2000
MOODY'S CONFIRMS RATINGS ON ALL PDVSA VENEZUELAN PROJECTS Moody's Investors Service confirmed the following ratings on heavy oil project financings in Venezuela: Petrozuata Finance Inc. at Baa2, Cerro Negro Finance, Ltd. at Baa2, Sincrudos de Oriente Sincor C.A. at Baa3 and Fertinitro Finance Inc. at Baa3. The outlooks are stable. These ratings were placed on review on September 9, 1999, due to the rating agency's concerns that risks to debtholders are increasing as a result of moves by the government of Venezuela to increase its control over the management and strategic direction of Petroleos de Venezuela S.A. (PDVSA). These concerns extended to potential changes in Venezuela's legal framework for oil and gas investment and possible limits on PDVSA's ability to meet its financial commitments to the projects.


Moody's confirmation is based on the following conclusions:

- All of the projects continue to progress toward completion. Although there have been cost overruns, these are being met by sponsor contributions in the form of equity or subordinated loans that rank behind the rated bonds and bank debt.

- PDVSA continues to bear its share of obligations to the projects, including cost overruns, and has budgeted for the projects in its capital spending over the next few years. Sincor represents the project with the highest remaining investment obligations from Sponsors. With a more positive outlook for oil prices in the intermediate term, the company should have the cash flow to fund all its commitments.

- The risk that the government will interfere with PDVSA's ability to fund its commitments is mitigated by the need to continue to attract foreign investment and to retain access to the global capital markets. In addition, under reasonable assumptions of oil prices, the projects will earn an adequate economic return to Venezuela.

- Although future projects may be subject to differing fiscal or legal regimes, the government continues to voice its intent to leave the current projects in tact and its support for the development of heavy oil and of the natural gas sector. The projects are currently attracting billions of Dollars in foreign capital for development and supporting much needed job creation.

- The projects continue to benefit from sound legal structures. Once these projects achieve production, U.S. dollar payments flow through an offshore trustee subject to New York law under irrevocable instructions that cannot be altered, thereby protecting the cash flows for the debt holders. Government interference with the legal framework would have a negative impact on its ability to access the foreign capital markets.


Moody's warns, however, that PDVSA will face uncertainties for some time to come. The Venezuelan political system is undergoing seismic changes even as the country faces enormous economic and fiscal pressures. Recent devastating floods have imposed additional financial burdens on the country. PDVSA will remain the entity that generates most of Venezuela's foreign exchange and thus will remain the vehicle for funding social programs and subsidizing economic shortfalls. It will remain a tempting target for the satisfaction of the government's future cash flow needs.


In monitoring the progress of the projects, Moody's notes that they have all encountered several similar challenges, albeit differing in magnitude. Brief labor strikes and subsequent increased labor costs have impacted the construction budgets of all the projects and will affect ongoing expenses as well. The overvaluation of the Bolivar on an official basis, although partly mitigated by local inflationary assumptions, has also been a large factor in the cost overruns of the projects.


PETROZUATA


The first of the heavy oil projects, Petrozuata Finance Inc. ("Petrozuata"), has been hit the hardest, with estimated cost overruns of 28%, primarily related to the Bolivar and labor costs. While large in magnitude and certainly impacting the expected sponsor returns, the overruns are being funded with Sponsor equity or subordinated debt and, at this juncture, projected debt service coverage does not appear to be unduly affected. Reservoir performance has also been troublesome to the project, requiring an accelerated drilling program and different drilling techniques to bring output up to expectations. Higher than expected prices for early diluted oil of 92,000 bpd are helping to offset these higher costs to some degree. Petrozuata is 85% complete, with projected completion scheduled for October, 2000 at a total construction cost of $3.4 billion, including cost overruns and accelerated drilling.


CERRO NEGRO


Cerro Negro Finance, Ltd. ("Cerro Negro"), 43.5% complete, has expended $870 million and currently forecasts construction overruns of 6%. As in all the projects, cost overruns will be funded by either Sponsor equity or subordinated debt when required. Cerro Negro field activity is showing higher than expected production, averaging 1,400 to 1,600 bpd per well. Early diluted oil production of 60,000 bpd has had to bypass the central processing unit, which is experiencing construction delays, but is being processed as is at the Chalmette refinery in Louisiana, a joint venture between Mobil and PDVSA. Project completion is expected to occur June, 2001 with a construction cost of $1.58 billion.


FERTINITRO


Fertinitro Finance Inc. ("Fertinitro"), an ammonia and urea project utilizing low cost associated gas for feedstock, is 86.5% complete with full completion expected by the fourth quarter of 2000. Total construction costs are forecast at $852 million, 13% over plan. The project faces different product price concerns as its markets have generally improved only 13% over the historic lows of a year ago, while the oil prices facing the heavy oil projects have more than doubled over the prior year. FertiNitro enjoys a $0.50/MMBtu feedstock price, the lowest in the industry, escalating only when ammonia sales prices reach certain levels. Combined with permanent closures and shutdowns of higher cost facilities occurring in its industry, Fertinitro's competitive position remains intact.


SINCOR


Sincrudos de Oriente Sincor C.A. ("Sincor"), the latest of the heavy oil projects under construction, faces concerns over its ability to fund the large $3.7 billion expected construction obligations. The project, which is about 33% complete, was unable to economically float its bond offering in August 1998, when the emerging bond markets collapsed. The Sponsors, including PDVSA with a 38% share, agreed to fund all the obligations above the bank commitments of $1.2 billion. Moody's regards PDVSA's ability to fund its share of the obligations as an increased near-term risk, particularly in light of the potential for increased government reliance on PDVSA in the next few years. However, we have reviewed the capital budget of PDVSA and these obligations do not constitute an overly large percentage of those figures over their term. Sincor will upgrade its product to a significantly higher 30-32o API light crude as opposed to the heavier, sour crudes of the other projects. This offers a higher margin potential going forward. Sincor's current forecasts indicate a 3.7% construction cost overrun, with $3.79 billion expended to date.




CONFIRMED RATINGS ARE:


Petrozuata Finance Inc. - Backed Senior Secured (U.S. dollar) Baa2

Cerro Negro Finance, Ltd. - Backed Senior Secured (foreign currency) Baa2

Sincrudos de Oriente SINCOR C.A. - Senior Secured Bank Credit Facility (foreign currency) Baa3

FertiNitro Finance Inc. - Backed Senior Secured (foreign currency) Baa3

No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​
Moodys.com