Fitch rates Fovial notes CCC+(sf)

Fitch Ratings said it assigned an expected CCC+(sf) rating to Fondo de Conservacion Vial de El Salvador (Fovial) planned $500 million of senior secured notes.

Fovial is controlled by the Republic of El Salvador’s (RES) government. “Fitch considers Fovial's credit highly influenced by that of RES' (CCC+), and that the sovereign has strong incentives to support this entity due to the role it plays within RES' economy, Fitch said in a press release.

The notes will be primarily backed by a road maintenance tax (contribucion de conservacion vial or CCV tax), that originates from the sale or any form of transfer of ownership of diesel, gasoline or other fuel blends, performed by importers and refiners who will sign notice and acknowledgment agreements (N&As), committing them to pay the tax into an offshore collection account controlled by the indenture trustee, the agency said.

The proceeds will be used to repay all its outstanding debt and for general corporate purposes.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.