Fitch affirms Salta Hydrocarbon

Fitch Ratings said it affirmed the CCC global scale foreign and local currency ratings of Salta Hydrocarbon Royalty Trust $234 million targeted amortization notes and removed the rating from the Rating Watch negative status.

The outlook is stable.

Fitch said the rating action is based on the better cash flow performance showed by the bond since 2004 due to an increase in the hydrocarbon well-head prices which impact the collateralized royalty incomes positively, despite a context of decreasing production levels. These revenues achieved nominal growth of 16.9% and 16.6% in 2004 and in the first quarter of 2005, respectively, allowing the bond to make timely payments of interest.

Nevertheless, these funds remained insufficient to make principal payments at the original targeted schedule until Dec. 28, 2004. As of March 28, this trend was reversed, registering a principal payment above the targeted payment, showing for the first time a decline in the difference between the actual outstanding debt and the balance in the original amortization schedule.

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