Fitch Affirms Ratings on Peruvian CRPAO Securitizations

CHICAGO--()--Fitch Ratings has affirmed the ratings on four transactions related to the financing of Peru's IIRSA Sur and IIRSA Norte toll-roads as follows:

IIRSA Norte Finance Limited

--Series 2006-1 at 'BBB+'; Outlook Stable.

Interoceanica IV Finance Limited (InterSur)

--Series 2007-1 at 'BBB'; Outlook Stable;

--Series 2007-2 at 'BBB'; Outlook Stable.

Peru Enhanced Pass-Through Finance Limited (IIRSA Sur)

--Class A-1 at 'BBB'; Outlook Stable;

--Class A-2 at 'BBB'; Outlook Stable.

Interoceanica V Finance Ltd. (IIRSA Sur Tramo V)

--Series 2008-1 at 'BBB'; Outlook Stable;

--Series 2008-2 at 'BBB'; Outlook Stable;

--Series 2008-3 at 'BBB'; Outlook Stable.

The rating affirmations reflect Peru's long-term foreign currency Issuer Default Rating (IDR), which was affirmed by Fitch at 'BBB' with a Stable Outlook on Nov. 9, 2012. The affirmations also reflect timely debt service payments made according to the transactions' amortization schedules.

These transactions are backed by certificados de reconocimiento de pago annual de obras (CRPAOs), certificates issued by the Government of Peru (GOP) through the Ministry of Transportation and Communications (MTC). CRPAOs are delivered from the GOP to concessionaires as compensation for advance on works on the Interoceanica Sur and Interoceanica Norte toll-roads as part of the initiative 'Integracion de la Infraestructura Regional Sudamericana' (IIRSA).

All generated CRPAOs are sold to the trusts and are not subject to any condition or performance obligation relating to the concession agreement. Therefore, note holders are not exposed to construction risk.

Timely debt service on the notes hinges on the continued payment on all purchased CRPAOs, which are backed by the full faith and credit of the GOP. While legally different from public debt, Fitch views the difference in probability of honoring one obligation over the other as immaterial. The rationale behind the rating of the notes is similar to a government pass-through.

For each transaction outstanding CRPAOs as of September 2012 and CRPAOs expected to be purchased over the life of the transactions would provide cash flows in amounts stated as follows:

IIRSA Norte Finance Limited:

--Face value outstanding: $377 million

--Face value at issuance: $472 million

Peru Enhanced Pass-Through Finance Limited

--Face value outstanding Tramo 2: $437 million

--Face value outstanding Tramo 3: $576 million

--Face value at issuance Tramo 2 & Tramo 3: $1.2 billion

Interoceanica IV Finance Limited

--Face value outstanding: $481 million

--Face value at issuance: $562 million

Interoceanica V Finance Limited

--Face value outstanding: $374 million

--Face value at issuance: $413 million

IIRSA Norte Finance Limited benefits from a USD$60 million partial credit guarantee (PCG) provided by the Inter-American Development Bank (IDB; foreign currency IDR 'AAA'/Stable Outlook). At present value, the PCG covers 27% of the outstanding balance of the notes allowing the transaction to be rated one notch above Peru's IDR.

In rating these transactions, Fitch incorporates methodologies from 'Global Structured Finance Rating Criteria' and 'Criteria for Partial-Credit Guarantees in Emerging Markets'.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (June 6, 2012);

--'Criteria for Partial-Credit Guarantees in Emerging Markets' (April 18, 2012).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923

Criteria for Partial-Credit Guarantees in Emerging Markets

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=677063

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Contacts

Fitch Ratings
Primary Analyst
Cristina Madero, +1-312-368-2080
Associate Director
Fitch, Inc.
70 W Madison
Chicago, IL 60602
or
Secondary Analyst
Cinthya Ortega, +1-312-606-2373
Director
or
Committee Chairperson
Greg Kabance, +1-312-368-2052
Managing Director
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Cristina Madero, +1-312-368-2080
Associate Director
Fitch, Inc.
70 W Madison
Chicago, IL 60602
or
Secondary Analyst
Cinthya Ortega, +1-312-606-2373
Director
or
Committee Chairperson
Greg Kabance, +1-312-368-2052
Managing Director
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com