Fitch Publishes Surveillance Criteria for Rating Oil Vessel-Backed Financing in Latin America
Fitch Ratings has published surveillance criteria for rating oil
vessel-backed financing in Latin America. It replaces the prior criteria
report titled 'Criteria for Rating Oil Vessel-Backed Financing in Latin
America' dated Dec. 18, 2014.
This report outlines Fitch's criteria for surveillance of transactions
backed by long-term charter and services agreements related to offshore
vessels used in different stages of the oil exploration and production
(E&P) chain in Latin America. These assets include drilling rigs,
floating-production storage and offloading (FPSO) units and shuttle
The key changes made to existing criteria include the application of
this rating approach to existing ratings for surveillance purposes, and
the determination of the transaction's rating cap as the lower of
one-notch above the operator's credit quality (if early termination
clauses related to the bankruptcy of the operator exist) and Fitch's
view of the offtaker's payment obligation strength.
The criteria also outline a new framework to determine the offtaker's
payment obligation strength based on several factors, including: (i) the
attractiveness of the underlying asset(s) for the offtaker, and the
strategic importance of the asset to the country's development of the
oil and gas industry; (ii) the operator's relationship with the
offtaker; (iii) the operating risks associated with the asset, including
exposure to performance / operational risk; (iv) history of the offtaker
terminating contracts; (v) the financial terms of the contract; and (vi)
the competitive environment and barriers of entry to that market.
The changes contemplated by the new criteria will not have an impact on
existing ratings, as all transactions that incorporate early termination
clauses related to the bankruptcy of the operator are rated within one
notch of the operator's credit quality and no higher than Fitch's view
of offtaker's payment obligation strength.
'Surveillance Criteria for Rating Oil Vessel-Backed Financing in Latin
America' is available at 'www.fitchratings.com'
or by clicking on the link below.
Additional information is available on www.fitchratings.com
Criteria for Rating Oil Vessel-Backed Financings in Latin America
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PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS
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OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES
AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF
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RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR
RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY
CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH
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Copyright Business Wire 2015
Source: Business Wire
(December 30, 2015 - 10:08 AM EST)
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