Fitch assigns A+ rating to US$66mn Esval bonds

Credit ratings agency Fitch Ratings has assigned its A+ rating to new bonds totaling some US$66mn from Chile's Region V water utility Esval, Fitch announced Tuesday. The outlook is stable. The bonds will be issued in the country's inflation-indexed currency, the UF, with 70% of proceeds going to pay a syndicated loan and the remainder to investment and other debt refinancing. Fitch also increased its classification on Esval series A shares to level 2 from level 3, while maintaining its A+ on existing bonds (Series A-D) and its level 3 classification on series B shares. The classification reflects Esval's monopolistic position in the region's waterworks sector and the technical and financing backing of its principal shareholder, local group Consorcio Financiero. Factors restricting classification include seasonal variations in water demand, natural risks which could affect water availability and changes in the regulatory framework and rates determination processes. Esval plans to invest US$120mn between this year and end-2006, of which US$68mn will go on increasing drinking water capacity and US$52mn on wastewater works. The utility boasts 99.4% drinking water coverage, 91.4% sewerage coverage and treats 94% of the sewage (wastewater) collected. It serves some 1.9 million residents. Esval posted a 5.92bn-peso (US$9.5mn) consolidated net profit in the first quarter, up 2.43% from 1Q03. In 2003, it posted a 12.8bn-peso consolidated net profit, up 1.59% from the previous year. For Fitch's full report on Esval (in Spanish), paste the following link in your browser: www.bnamericas.com/rc_search_detail.xsql?id_documento=49208&Tx_idioma=E