Fitch Rates SUAM Finance B.V. Senior Guaranteed Bonds 'BBB+'

NEW YORK--()--Fitch Ratings has assigned a 'BBB+' rating to SUAM Finance B.V.'s (SF) issuance of 10-year senior guaranteed bonds. The notes, in the amount of USD 500 million, will mature in April 2024, and carry a fixed interest rate of 4.875% per annum; interest payments will be made semi-annually. The notes are fully and unconditionally guaranteed by Sura Asset Management (SUAM), and by the holding companies of SUAM's operating entities in each country: SURA S.A. (Chile), SURA Asset Management Mexico S.A. de C.V. (Mexico), SURA Asset Management Peru S.A. (Peru), and Tublyr S.A. (Uruguay).

The notes will be senior unsecured obligations of SF and will rank equal in right of payment with all of its future senior unsecured and unsubordinated indebtedness. The guarantees will be senior unsecured obligations of the guarantors and will rank equal in right of payment with all of their other existing and future senior unsecured and unsubordinated indebtedness.

KEY RATING DRIVERS

As SUAM unconditionally guarantees SF's notes, the notes receive the same rating. SUAM has long-term local and foreign currency Issuer Default Ratings (IDR) of 'BBB+'; driven by SUAM's strong credit profile based on its leading regional franchise, strong operating environment, ample expertise, diversified, stable earnings, sound leverage and debt service ratios, good operating performance and sound risk management.

In addition, SUAM's ratings incorporate the expansion of the company in a mostly regulated business in the region and the challenges to expand its revenue source from regulated and non-regulated businesses. For more information on SUAM's ratings please refer to the Fitch press release: 'Fitch Rates SURA Asset Management 'BBB+'; Outlook Stable' dated April 1, 2014, and available at www.fitchratings.com.

SUAM will use the proceeds of these notes to replace existing debt and for general business purposes. Its overall leverage should not change after this issuance.

While the other guarantors have strong credit profiles on their own, they are part of SUAM's core operations and the key EBITDA and cash generators for the consolidated company. As such, their credit profile, strengths and challenges are already considered in Fitch's assessment of SUAM's creditworthiness. However, their role in the bond structure ratifies Fitch's belief that SUAM operates as a deeply integrated company that is legally bound to have separate legal vehicles operating in each one of its very regulated markets but has full control of their operations and ample access to and control of their cash flows.

RATING SENSITIVITIES

The senior guaranteed notes' rating is sensitive to any changes in SUAM's IDRs. In particular, given SUAM's business profile, continued growth and sustained performance - amidst stable economic and regulatory environments - coupled with improved adjusted leverage (less than 2.5x) and debt service ratios (above 8x) could benefit its ratings.

Should SUAM's debt levels rise beyond current projections, or should the company's operating efficiency and performance decline below the industry average, eroding its credit metrics (Debt/Adj. EBITDA above 3.5x or Adj. EBITDA/Interest Expense below 6x), its ratings would be pressured downwards. In addition, an adverse change in regulation or dismal economic performance in its key markets would affect its ratings negatively.

KEY ASSUMPTIONS

The ratings assigned by Fitch are based on the following assumptions which could - if they were no longer applicable - affect the ratings:

-- SUAM will continue to operate in generally benign economic environments with only minor and/or temporary downturns in growth or employment in its key markets.

-- Regulation in its key markets will remain constructive to the business in terms of prices with only minor, incremental changes that should not significantly change fee structures.

-- SUAM's operating companies will continue to perform at par or better than the industry average and fully comply with all regulatory requirements.

-- SUAM will continue to have the ability to declare dividends from its operating subsidiaries and ample access and flexibility to manage their liquidity.

-- SUAM will continue to centralize debt at the headquarter level and will not significantly increase its financial indebtedness.

Fitch currently rates SUAM as follows:

--Long Term Foreign Currency Issuer Default Rating (IDR): 'BBB+', Outlook Stable.

--Short Term Foreign Currency IDR: 'F2'.

--Long Term Local Currency IDR: 'BBB+', Outlook Stable.

--Short Term Local Currency IDR: 'F2'.

SUAM Finance B.V.:

--Senior Guaranteed Bonds: 'BBB+'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Jan. 31, 2014);

--'Investment Manager and Alternative Funds Criteria' (Dec. 12, 2013).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732397

Investment Manager and Alternative Funds Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=725057

Additional Disclosure

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. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE 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 WEBSITE.

Contacts

Fitch Ratings
Primary Analyst
Diego Alcazar
Director
+1-212-908-0396
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Abraham Martinez
Director
+56-2-2499-3317
or
Committee Chairperson
Franklin Santarelli
Managing Director
+1-212-908-0739
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst
Diego Alcazar
Director
+1-212-908-0396
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Abraham Martinez
Director
+56-2-2499-3317
or
Committee Chairperson
Franklin Santarelli
Managing Director
+1-212-908-0739
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com