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Prospect News home > News index > List of issuers H > Headlines for Hamaca Holding LLC (Petrolera Hamaca, SA) > News item |
Moody's cuts Venezuelan oil projects outlooks to negative
Moody's Investors Service said it affirmed the B1 ratings of four heavy crude oil projects in operating in Venezuela - Petrozuata Finance Inc., Sincrudos de Oreinte Sincor CA, Hamaca Holding LLC and Cerro Negro Finance Ltd. - and changed the outlook for each project to negative from stable.
The change in outlook follows recent mandated cutbacks in production due to Venezuela's OPEC commitments and political developments in Venezuela that appear to give the executive branch power, by decree, to nationalize, in part, or in whole, the operations of the four projects located in the Orinoco region of Venezuela.
The agency said the negative outlook considers the lack of clarity surrounding any negotiations by the government and the sponsors regarding how lenders may be affected by such a change in ownership.
The cutbacks, unlike the potential changes in equity ownership, can have a direct negative impact on the level of cash flow available for debt service, Moody's said, adding that the impending changes in ownership could represent a significant weakening of the contractual agreements underlying these projects and present some uncertainty regarding how operational, capital spending and distribution decisions will be made going forward.
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