FertiNitro Bond Pressure Lingers

Fitch says it is keeping the CCC ratings of Venezuela’s FertiNitro Finance’s $250m 8.29% secured bonds due 2020 on rating Watch Negative. Fitch expects rating pressure to remain through 2011, when the project reaches its maximum annual debt service requirement. The subsequent decline in debt service coincides with the maturity of bank debt separate from the secured bonds. Fitch notes that FertiNitro on September 28 made timely payment of $40.3m in semi-annual debt service. “Overall, FertiNitro continues to make progress since Fitch’s last review in March 2010 with improved operational performance, resulting in positive cashflow and a debt service coverage ratio of 1.98 times,” it adds. FertiNitro is expected to deposit over $36m to the debt service reserve fund after the October debt payment.