Fitch Ratings has affirmed Nakilat Inc.’s senior and subordinated bond ratings at ‘A+‘ for USD850m series A senior secured bonds due 2033 and ‘A-‘ for USD300m series A subordinated second priority secured bonds due 2033.
The rating affirmations reflect Nakilat’s stable operating and financial performance. Reported revenues of USD828m partly reflecting a pass-through of higher operating costs slightly exceeded Fitch’s expectations for 2013. EBITDA remains in line with Fitch’s base case.
Debt service coverage ratios (DSCR) calculated by Fitch were at 1.35x for the senior debt and 1.23x for subordinated debt for 2013, slightly above last year’s DSCR of 1.21x. Fitch expects the DSCSR for the senior and subordinate debt to average 1.37x and 1.20x respectively until debt maturity in 2033. These ratios are based on the assumption of 363 operating days, O&M cost growth in line with US CPI of 2.5%, a LIBOR of 5.4%, a successful refinancing in 2025 at equivalent terms and full amortisation of the new debt until 2033.
Press Release, July 23, 2014; Image: Nakilat