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 December 30, 2015 - 10:08 AM EST
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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 tankers.

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

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=875783

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Fitch Ratings
Cinthya Ortega
Director
+1-312-606-2373
Fitch Ratings, Inc.
70 W Madison
Chicago, IL 60602
or
Greg Kabance
Managing Director
+1-312-368-2052
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com


Source: Business Wire (December 30, 2015 - 10:08 AM EST)

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