Fitch Ratings has affirmed the following ratings of Taboada Finance Limited:
--Series 2011-1 S/. 572,089,000 notes due 2029 at 'BBB';
--Series 2011-2 S/. 220,250,000 notes due 2033 at 'BBB';
--Series 2011-3 up to S/. 150,000,000 notes at 'BBB'.
The Rating Outlook is Stable.
Taboada Finance Limited is a special purpose company incorporated in the Cayman Islands. The underlying issuance is a securitization of the rights to receive future payments from SEDAPAL, the state-owned water utility company for the districts of Lima and Callao. Payment rights, in the form of retribucion por inversiones (RPIs), are related to the construction of Planta de Tratamiento de Aguas Residuales Taboada (Taboada), a wastewater treatment plant by ACS Servicios, Comunicaciones y Energia S.L. (ACS). ACS is the primary sponsor of the transaction through its local concessionaire, Planta de Tratamiento de Aguas Residuales Taboada S.A. (PTAR Taboada).
Repayment of the notes is primarily supported by the flows received from SEDAPAL of all water bill customer payments generated through banks. If flows from banks are not sufficient to cover debt service it is a direct obligation of SEDAPAL to cover debt service. Ultimately, repayment is an obligation of the government of Peru (GOP) through the Ministry of Housing, Construction and Sanitation (MVCS) to provide for any debt service shortfalls. In order to utilize the guarantee, SEDAPAL's and the local trustee's request for additional funds must follow a budgetary process. The reserve accounts have been sized to cover potential delays in the process, but there is no assurance that the budgetary process will not take a longer amount of time. A direct sovereign guarantee, similar to the CRPAOs (Certificados de Reconocimiento de Pago Annual de Obras), does not follow such process.
The rating affirmation reflects Fitch's view of additional reliance on the sovereign's contingent guarantee rather than on the incoming water utility flows. SEDAPAL can issue more debt from the trust without consequences, and therefore use more of the existing flows.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (Aug. 4, 2011);
--'Future Flow Securitization Rating Criteria' (June 24, 2011);
--'Peru' (June 8, 2010).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646569
Future Flow Securitization Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=634949
Peru
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=532185
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