London: Fitch Ratings has affirmed Nakilat Inc.’s $850m series senior secured bonds due 2033 at A+ with outlook stable.
The $300m series a subordinated second priority secured bonds due 2033 affirmed at A- with outlook stable.
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.
Fitch views Qatar as a long-term, reliable and low-cost producer of LNG globally, which has invested heavily in LNG production and transportation in recent years. Nakilat provides an essential service for the charterers, through the shipment of LNG from Qatar to the consuming markets, making the project strategically important within the Qatari vertically integrated LNG industry.