Fitch rates Clarendon Alumina note B+

Fitch Ratings said it assigned a preliminary B+ issue rating with a recovery rating of RR4 to Clarendon Alumina Production Ltd.'s proposed $200 million unsecured notes due 2021, which will benefit from an explicit unconditional and irrevocable guarantee by the Government of Jamaica for timely payment of interest and principal on the notes. Clarendon's B local- and foreign-currency issuer default ratings remain unchanged.

The outlook is stable.

Proceeds of the issuance will be used primarily to refinance existing debt obligations. Fitch said the proposed issuance, which is expected to close in November, will allow for a longer-term debt maturity profile and should improve the company's financial flexibility.

The ratings reflect the company's position as a partner in Jamalco - an alumina production joint-venture in Jamaica with Alcoa Inc. - and the support the company receives from the Government of Jamaica, its 100% owner. The agency said the ratings further benefit from the company's status as the official vehicle through which the government promotes and develops its bauxite mining and alumina production interests.

Nevertheless, the willingness of the Government of Jamaica to provide financial support could be hindered by its ability to do so, Fitch said, as the Jamaican government is highly indebted. Additionally, in the fiscal year ended March 31, 2006, Clarendon Alumina generated operating EBITDA of $10 million and had total debt of $166 million, resulting in a total debt-to-operating EBITDA ratio of 16.6x.

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