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Friday, November 17 2017 @ 10:31 PM AST

Fitch likely to rate Trinidad & Tobago one notch above junk

FORECAST



New York-based Fitch Ratings is likely to rate Trinidad and Tobago one notch above junk at BBB-.
That would be one notch above where Moody's has T&T rated and two notches below Standard & Poor's (S&P).

On October 30, 2017, Fitch Ratings affirmed Trinidad Generation Unlimited's (TGU) senior unsecured debt at 'BBB-'. Rating agencies tend to rate sovereigns (countries) first and then corporates (companies) and the latter's rating would usually be the same or at the very least constrained by the sovereign.

"The rating primarily reflects its importance to the country's energy matrix and operational integration with its ultimate parent, the Government of the Republic of Trinidad & Tobago," Fitch said. "Additionally, the rating is supported by highly stable cashflows generated under a long-term PPA with a tolling structure that eliminates commodity risk exposure. On a standalone basis, TGU would be similarly rated considering its position relative to other availability-based utilities as well as its current counterparty risk."

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