Moody's rates Clarendon Alumina note Ba2

Moody's Investors Service said it assigned a Ba2 foreign-currency rating to Clarendon Alumina Production Ltd.'s $200 million senior unsecured note issue due 2021. Payments on the notes are unconditionally and irrevocably guaranteed by The Government of Jamaica.

The outlook is stable.

Proceeds will be used to refinance existing secured debt, to refinance other liabilities and for general corporate purposes.

The agency said the Ba2 rating reflects the company's 100% ownership by the Government of Jamaica, the high support is receives from the government and its high dependence on the government.

The rating also reflects several key risk factors including the Jamaica-based company's single operating facility, high cost base, the nature of alumina off-take contracts and excessive leverage relative to revenues, earnings and cash flow generation, Moody's said. Pro-forma debt to EBITDA is estimated to be roughly 20x for the year ended March 31, 2006.

The stable outlook acknowledges the favorable conditions currently existing for aluminum and alumina and the modest improvement that Clarendon Alumina should be able to obtain for a portion of its alumina sales, Moody's added.

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