Recipient email addresses will not be used in mailing lists or redistributed.
Use semicolon to separate each address, limit to 20 addresses.
characters you see
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
Don't want to see this again?
Accept our to continue to Moodys.com:
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 information 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
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.
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
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.
18 Mar 2011
Approximately US$300 million of debt securities affected
New York, March 18, 2011 -- Moody's Investors Service has assigned a B1 Corporate Family Rating
(CFR) and a FC B1 senior unsecured debt rating on the Global Scale to
Inkia Energy Ltd's (Inkia) planned issuance of up to US$300
million of senior unsecured notes to be issued under a 144(A) registration.
This is the first time Moody's has rated Inkia. The rating
outlook is stable.
The B1 CFR and senior unsecured debt rating reflects our assessment of
Inkia's historical and projected consolidated credit metrics,
which we believe position the company at the upper end of the B-rating
category for unregulated power companies. Over the last three years,
Moody's calculates that the company's cash flow before working
capital changes (CFO pre-W/C) and cash flow coverage of interest
expense were below 12% and 3.0x, respectively,
while the company experienced negative free cash flow due principally
to various capital investment programs. Prospectively, Moody's
believes that these financial metrics will trend downward through 2012,
as the company completes its multi-year construction program at
Kallpa, a Peruvian based generation subsidiary, which is converting
its existing open-cycle natural gas facility (consisting of three
turbines) to a combined-cycle plant configuration (CC conversion).
The company anticipates the CC conversion will be completed during 2012
which should not only improve the plant's operating efficiency but
also its competitive position in the Peruvian power market. Over
this timeframe of continuing negative free cash flow, we anticipate
that the ratio of CFO pre-W/C to debt will average in the mid-to-high
single digits with CFO pre-W/C coverage of interest expense of
approximately 2.5x. Moody's notes that Inkia has committed
subsidiary level financing arrangements at the Kallpa level, which
will help fund this negative free cash flow.
While the rating incorporates the importance of the Peruvian subsidiaries
including not only the future expected cash flows from Kallpa but also
from its 21.1% economic interest in Edegel, the largest
generator in Peru, the rating also acknowledges the asset concentration
that exists at Kallpa which is somewhat balanced with the geographic diversity
of Inkia's cash flow stream from its investments in other Latin
American and Caribbean countries. The rating recognizes the predictability
of Kallpa's future cash flows, which is underpinned by the
existence of Power Purchase Agreements (PPAs) for the bulk of its available
energy that include certain cost indexation clauses, which help
to mitigate the impact of substantial variations in certain costs such
as fuel that the company may experience over the life of the PPAs.
The B1 rating also considers the degree of structural subordination that
exists at Inkia as a holding company and its full reliance on its subsidiaries'
dividend distributions to service its debt. In particular,
the rating points to the fact that Kallpa, the most important Inkia
subsidiary, is not anticipated to provide dividends to Inkia while
the CC conversion is being completed, and that Inkia's access
to cash payouts from its other prominent cash flow contributor,
Edegel, is limited until the outstanding bonds of its indirect intermediate
parent holding-company subsidiary, Southern Cone Power Peru
S.A. (SCPP) become due in 2012. Therefore,
Inkia bondholders will further rely over the near to medium term upon
dividends for debt service and other holding company obligations from
a variety of smaller subsidiaries. While annual holding company
needs are expected to be relatively modest and we anticipate internal
sources of holding company liquidity to remain adequate, the increased
reliance on the smaller and less predictable subisidaries for debt service
over this timeframe is a constraining factor in this rating assignment.
Beginning in 2013, Moody's anticipates SCPP and Kallpa will
be able to provide meaningful cash flow contributions to the parent beginning
in 2013, once Kallpa's CC conversion is completed and SCPP's
The B1 rating further considers the company's fairly sizeable growth
and development strategies currently centered around the construction
of Cerro del Aguila (Cerro), a 402 megawatt (MW) hydro project,
planned to be completed in 2015. While the company's future
performance may benefit from the construction of this cost-competitive
asset, we observe that Inkia's management has limited project
development expertise, particularly as it relates to the construction
of a multi-year hydro project. Moreover, Moody's
has limited insights into other potential investment projects that Inkia's
management may pursue outside of the Cerro project.
The rating acknowledges Inkia's parent company Israel Corporation's
(IC) sizeable capital commitment to help fund Inkia's growth and
development; however, such support is balanced by our understanding
of the terms and conditions of the shareholder loans between IC and Inkia,
which we consider to be somewhat akin to subordinated debt-like
obligations in our rating assessment of Inkia. That being said,
we observe that the terms and conditions of the unsecured notes limit,
among others things, the incurrence of additional debt and place
restrictions on payments to the shareholder (both dividends and payments
under the shareholder loans) which enhances Inkia's financing flexibility,
particularly through 2012.
Proceeds of this offering are expected to be used for the repurchase of
Inkia's outstanding Nuevos-soles 9.25% senior
secured bonds due in 2015 (about US$82.8 million),
for working capital purposes, to finance its expected equity contribution
in Cerro and for other projects and acquisitions that the company may
pursue in the future.
Moody's has reviewed preliminary draft legal documentation for the
proposed senior unsecured notes and the assigned rating assumes that there
will be no material variation from the draft reviewed and that all agreements
will be legally valid, binding and enforceable.
The stable rating outlook reflects our opinion that Inkia's rating
is likely to remain well positioned within the B-rating category
based upon our expectations for future consolidated credit metrics over
the next few years, particularly, with the CC conversion project
well underway at Kallpa, the related dividend limitations that are
expected to persist during this timeframe, and an anticipated increase
in consolidated indebtedness associated with the funding of new growth
projects such as Cerro.
Inkia's ratings could see some positive momentum after completion
of the CC conversion expansion and receipt of some steady dividend distributions
from this critical subsidiary.To that end, once the Kallpa
CC conversion nears completion, a positive rating action could surface
if, as we expect, Inkia's consolidated credit metrics
(including any new project finance debt) improve such that cash flow coverage
of interest expense, cash flow to debt and retained cash flow (RCF)
to achieve levels in excess of 2.5x, 13% and 8%,
respectively, on a sustainable basis. Additionally,
any improvement in Inkia's consolidated financial performance will
be balanced against our assessment of the company's growth and development
initiatives underway at that time.
Complications in the completion of Kallpa's combined cycle expansion
program, and/or political or operational problems at some of the
other key subsidiaries that result in a material deterioration in the
anticipated dividend distributions to Inkia and/or in the consolidated
credit metrics could put downward pressure on the ratings. Specifically,
if Inkia reports consolidated cash flow to debt, and RCF to debt
below 7% and 3%, respectively, and cash flow
interest coverage of less than 1.5x, on a sustainable basis.
The principal methodology used in rating Inkia was the Unregulated Utilities
and Power Companies methodology (August 2009). Other methodologies
and factors that may have been considered in the process of rating this
issuer can also be found in our website www.moodys.com.
Headquartered in Lima, Peru, Inkia is an international holding
company incorporated in Bermuda that holds ownership stakes in power generation
companies in Peru (Government bond rating: Baa3, stable),
Bolivia (Government bond rating: B1, positive), Dominican
Republic (Government bond rating: B1, stable), El Salvador
(Government bond rating: Ba1, negative), Jamaica (Government
bond rating: B3, stable) and Panama (Government bond rating:
Baa3, stable). Inkia has net ownership of 1,191MW (adjusted
to account for its proportional ownership interest) of effective generation
capacity. At year-end 2010, Inkia reported consolidated
assets of around US$1.2 billion and cash flow from operations
of around US$104 million.
Information sources used to prepare the credit rating are the following:
parties involved in the ratings, parties not involved in the ratings,
public information, confidential and proprietary Moody's Investors
Service information, and confidential and proprietary Moody's
Moody's Investors Service considers the quality of information available
on the issuer or obligation satisfactory for the purposes of assigning
a credit rating.
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.
Please see ratings tab on the issuer/entity page on Moodys.com
for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Investors Service's Credit Ratings were fully digitized
and accurate data may not be available. Consequently, Moody's
Investors Service provides a date that it believes is the most reliable
and accurate based on the information that is available to it.
Please see the ratings disclosure page on our website www.moodys.com
for further information.
Please see the Credit Policy page on Moodys.com for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
Infrastructure Finance Group
Senior Vice President
Infrastructure Finance Group
Moody's Investors Service
Moody's Investors Service
Moody's assigns first-time B1 rating to Inkia Energy
250 Greenwich Street
New York, NY 10007
No Related Data.
© 2018 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. 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 SUCH 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 appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. 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. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.
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 appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.