Fitch cuts Inversiones Alsacia bonds to CC

Fitch Ratings said it downgraded the rating for Inversiones Alsacia, SA's $464 million senior secured bonds due in 2018 to CC from B.

Currently, $383 million of bonds are outstanding. The Negative Rating Watch is being resolved with this downgrade.

Fitch said the downgrade reflects: (a) Heightened risk of default in the coming payment dates as EBITDA continues shrinking while debt service increases in accordance to the original amortization schedule; (b) Debt Service Reserve Account balance is only $9.7 million and very likely to be depleted in the next debt payment; (c) operating costs escalation, despite the efforts of the managerial team with; and (d) O&M and Overhaul Reserve Accounts current balances are much lower than the minimum required and it is foreseen that it will be very challenging for Alsacia to have them refunded.

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