Moody's rates Costanera Norte hwy. bonds Baa2

Moody's has assigned its Baa2 classification to US$257mn in bonds from highway concessionaire Costanera Norte, which is building an expressway in Chilean capital Santiago, Moody's said in a statement Friday. The outlook is stable. The bonds, which correspond to series A senior bonds (US$51.3mn) due in 2016 and series B senior bonds (US$205mn) due in 2024, are in Chile's inflation indexed unit, the UF. The investment grade underlying rating of Baa2 for the project reflects the availability of the minimum revenue guarantee from the public works ministry, the fundamental importance of the alignment to Santiago's urban transportation network, the synergies expected from the timing and coordination with three other tollroad projects in the greater Santiago area which will also feature free-flow electronic tolling technology, and the advanced stage of construction as well as the proven capabilities of the construction team which help to mitigate completion risk, Moody's explained. According to the report, the bonds are expected to be insured by the Inter-American Development Bank (IDB) (rated Aaa) and AMBAC Assurance Corporation (rated Aaa). Based on the unconditional guarantees of the IDB and AMBAC, Moody's expects to assign the bonds a rating of Aaa subject to Moody's review of the insurance policies. The US$442mn, 30km expressway will link Santiago's northeast with the city's west, and is slated to be finished by end-2004. The project also includes a 4.75km, US$14mn extension to connect the expressway with highway Ruta 68 that connects Santiago with Region V port city Valparaiso and neighboring coastal city Vina del Mar. Impregilio (70%), Simest (10%), Empresa Constructora Tecsa (10%) and Empresa Constructora Fe Grande (10%) make up the Costanera Norte consortium, which won the 30-year concession in 1999. For the full report see www.bnamericas.com/rc_search_detail.xsql?id_documento=41333&Tx_idioma=I.