CHICAGO - (Business Wire) Fitch Ratings has affirmed two Diversified Payment Rights (DPRs) transactions from Peruvian banks as follows: -- CCR Inc. Mt-100 Payments Rights Master Trust (BCP) series 2008-A and series 2008-B at 'A-';
-- Continental DPR Finance Company (Continental) series 2008-A at 'A'.
The Outlook on all ratings is Stable.
As a primarily raw-material exporter, Peru has been negatively affected by the global economic slowdown. The collapse in commodities prices during 2008 and early 2009, specifically in base metals, as well as a lower volume of exports have resulted in deterioration to the country's trade balance. According to projections by the EIU, Peru's export sector will decline by about 20% when comparing 2009 to 2008.
This decrease in export volume has had a direct impact on the volume of collections for both DPR programs. Both are exposed to large beneficiary concentrations among exporters, and mining companies in particular. As compared to 2008, remittance flows for the BCP and Continental programs have decreased approximately 20% and 14%, respectively.
However, in affirming the ratings, Fitch notes that each program is still performing positively, with coverage levels remaining high and signs of stabilization in flow volume. Despite the declines in collections, current maximum debt service coverage levels remain strong, greater than 65 times (x) monthly requirements for BCP and 100x quarterly requirements for Continental.
The affirmations of the future flow ratings are further supported by Banco de Credito del Peru's and BBVA Continental's strong performance through the crisis, reflecting their dominant positions as Peru's two largest banks. The ratings for Banco de Credito del Peru were recently upgraded to 'BBB' from 'BBB-'. Additionally, the long-term foreign and local currency Issuer Default Ratings (IDRs) of BBVA Continental were affirmed by Fitch in August 2009 at 'BBB' and 'BBB+', respectively.
Future flow transaction ratings also are linked to the sovereign environment. In May of 2009, the sovereign ratings of Peru were affirmed at 'BBB-' IDR and 'BBB' LC IDR. These ratings reflect the country's solid macroeconomic fundamentals and the economy's capacity to withstand a commodity price collapse, coupled with a recession in the world's advanced economies, and reduced capital and financial flows.
These future flow rating actions reflect the application of Fitch's current criteria which is available at 'www.fitchratings.com' and specifically include the following reports:
-- 'Future Flow Securitization Rating Criteria' (Oct. 26, 2007);
-- 'Global Structured Finance Rating Criteria' (Sept. 30, 2009).
Additional information is available at 'www.fitchratings.com'.
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Fitch Ratings
Brian Bertsch, +1-212-908-0549 (New York)
brian.bertsch@fitchratings.com
Cindy Stoller, +1-212-908-0526 (New York)
cindy.stoller@fitchratings.com
Mark Salgado, +1-312-368-2080 (Chicago)
Pilar Montanes, +1-312-606-2304 (Chicago)
