Moody's places Baa2 rating on Talca Chillán bonds

Bnamericas Published: Thursday, August 04, 2005
Moody's has assigned its Baa2 ratings with a stable outlook to US$170mn in bonds issued by Chilean highway concessionaire Talca Chillán, which operates an expressway in Regions VII and VIII, Moody's announced. The US$170mn bonds due in 2019 were 1.6 times oversubscribed, as total demand came to US$272mn. The bonds also carry a rating of Aaa based upon a financial guaranty insurance policy by MBIA Insurance Corporation. The project's Baa2 underlying rating reflects the availability of the minimum revenue guarantee from the public works ministry, as well as "the favorable alignment of Talca-Chillán along the only continuous north-south highway in Chile, the lack of comparable high speed alternatives due to geographic and government funding constraints [and] low regulatory and political risks," Moody's said. The Talca Chillán concession links the namesake cities and was granted in March 1996 for a period of 19 years with an initial investment of US$169mn. The 193km road has two lanes in each direction and 31 bridges. The concessionaire is owned by the Chilean unit of Cintra Spain (67.6%), Constructora Ferrodel (8.5%), Inversiones Sodeia Cinco (23.6%) and Ferrovial Agroman Empresa Constructora Ltda (0.3%).

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