Fitch rates Itabo notes B-

Fitch Ratings said it expects to assign a B- long-term rating with a recovery rating of RR4 to Itabo Dominicana SPV's proposed issuance maturing 2020.

The notes are guaranteed by Empresa Generadora de Electricidad Itabo, SA and the notes are attached to AES Andres Dominican SPV's notes, the agency said.

As part of this transaction, Fitch also said it assigned an issuer default rating of B- to Itabo Dominicana SPV, and affirmed Itabo's national long-term rating of BBB(dom).

The outlook is stable.

The ratings reflect the company's dependence upon government subsidies for its financial sustainability, Fitch said.

Notwithstanding recent improvements in the timeliness of government payments, the risks of operating electric generation assets in the Dominican Republic remain high and reflect the distribution companies' low collections and high losses, the agency said. These risks translate into high cash flow volatility for all generation companies, Fitch said.

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