Kelas Investasi Proyek 2019
Kriteria Credit Rating Project Finance
Tugas: Identifikasi dan Pembahasan Credit Rating Methodology & Criteria
No Topic/Aspect
1 Definition of 'Project Finance'
2 Definition of Main Rating Criteria
3 Grouping of Sub Rating Criteria
Nama:
NPM :
Standard & Poors 2014
Project activity that have two distinct periods Construction and Operations
which is In order for a debt issue or debt-like obligation to be assigned an
issue credit rating under these criteria :
1. A project finance transaction structure
2. Limited recourse or nonrecourse to the sponsors or shareholders of a
project, but full recourse to the project's cash flows and assets
3. Both revenue and operating risk
4. A limited asset life with restricted activities
Main rating criteria of standart & Poors project finance ratings methodology is to
ensure our criteria are comparable globally and keep pace with market changes. The are credit ratings, but the agency also publishes ratings, scores and other relative
remaining key components of our Project Finance criteria and the overarching
framework covering the entire methodology covering 4 components :
1. Counterparty Risk Criteria
2. Construction Phase Criteria
3. Operations Phase Criteria
4. Transaction Structure Criteria
1. Counterparty Risk Criteria
1a. Assigning A Counterparty Dependency Assessment (CDA)
1b. Materiality
1c. Replaceability
1d. Credit Enhancement For Counterparty Replacement
2. Construction Phase Criteria
2a. Construction Phase Business Assessment
Barra Farras Athaya
1906323022
Fitchratings 2011
The “Rating Criteria for Infrastructure and Project Finance” (Master Criteria) is used
when rating debt instruments where repayment is dependent upon cash flows from
the construction and operation of a stand-alone project or infrastructure facility,
including those that may encompass several project assets in different locations
covering :
1. Instrument Ratings
2. Evaluate Cash Flow Stability
3. Evaluate Financial Structure
4. Evaluate Stress Scenarios
5. Typical Investment-Grade Attributes
Fitch Ratings publishes opinions on a variety of scales. The most common of these
opinions relating to financial or operational strength. For example, Fitch also
provides specialized ratings of servicers of residential and commercial mortgages,
asset managers and funds. In each case, users should refer to the definitions of
each individual scale for guidance on the dimensions of risk covered in each
assessment covering :
1. Structure and Information
2. Completion Risk
3. Operation Risk
4. Macro Risks
5. Debt Structure
6. Debt Service and Counterparty Risk
1. Structure and Information
1a. Ownership and Sponsors
The quality of owners or sponsors is an important consideration when
assessing the potential success of a project. Fitch considers this attribute to be
asymmetric. Weak sponsors may cause the rating to be lower, all other things
being equal. In contrast, while the presence of strong sponsors will be considered
when evaluating the impact of stress scenarios and the ability of an SPP to
manage through them, strong sponsors cannot substantially elevate the
1b. Project Vehicle Status and Project Structure
This part of the analysis is undertaken to establish the degree to which factors
other than the economic success of the project might affect the project cash flows.
Fitch’s infrastructure and project finance criteria assume the existence of a project
vehicle or equivalent means of segregation, the SPP, to ring-fence the assets and
operation of the project and the cash flows, which are the repayment source of the
rated debt instruments. Similar ratings may be achieved through specific legal
frameworks without the existence of a project vehicle (as would be the case for
airport and other transportation revenue bonds in the U.S. for instance) or by
contractual structural features. Below is a diagram for a typical project financing.
1c. Legal and Regulatory
Forming an opinion of the quality of the legal framework upon which many
project assumptions rest is a prerequisite to the credit analysis. For instance, this
may be purely contractual or rely on statute or codified law, or a particular statutory
instrument, or the powers of a constitutional or statutory authority. The project
contract suite (and if appropriate, any legislation it may depend on) or detailed
summary documents (such as a prospectus) are reviewed for key commercial
elements and conformity to general market standards. Fitch analysts will look for
contract clarity, especially regarding allocation or transfer of risk within the project
structure.
1d. Use of Expert Reports
The information provided to Fitch may contain reports, forecasts, or opinions
provided to the issuer or their agents by various experts. These include legal
advisors, third-party engineers, traffic, market, fuel/resource or environmental
consultants, insurance advisors, and others. Sector criteria will describe the
reports, forecasts, or opinions that are most relevant to risk analysis in the related
sector. Where these reports contain matters of fact, Fitch will question the source
and reliability. Where the information is a forecast or opinion, Fitch expects these to
be based on well-reasoned analysis supported by the facts.
1e. Information Quality
The quality of information received by Fitch, both quantitative and qualitative,
can be a constraining factor for ratings. Information quality may constrain the rating
category to some maximum level or in extreme cases preclude the assignment of a
rating opinion. Information quality for the initial rating and for surveillance purposes
is considered when a project finance rating is first assigned. Fitch must be
confident that adequate ongoing data will be available to monitor and maintain a
rating once assigned. Information quality encompasses such factors as timeliness
and frequency, reliability, level of detail, and scope.
1f. Data Sources
Fitch’s analysis and rating decisions are based on relevant information available
to its analysts. The sources of this information are the issuer, the arranger, third-
party engineers or consultants, and the public domain. This includes relevant
publicly available information on the issuer, such as audited and unaudited (e.g.
interim) financial statements and regulatory filings. The rating process also can
incorporate information provided by other third-party sources. If this information is
material to the rating, the specific rating action will disclose the relevant source.
2. Completion Risk
2a. Contractors
 2b. Financial Risk Adjustment 2b. Cost Structure
2c. Construction Phase Stand-Alone Credit Profile 2c. Delay Risk
2d. Other Factors 2d. Contract Terms
2e. Contractual Risk Allocations
2f. Disputes
2g. Insurance and Force Majeure
2h. Construction Quality Assessment
2i. Related Infrastructure
2j. Technology Risk

3. Operations Phase Criteria 3. Operation Risk

3a. Operations Phase Business Assessment 3a. Operator
3b. Determining The Operations Phase SACP 3b. Costs
3c. Supply Risk
3d. Technology Risk
3e. Tail Risk
3f. Revenue Risk
3g. Other Considerations
3h. Infrastructure Development and Renewal/Obsolescence and Economic Life/
3i. Early Termination Risk

4. Transaction Structure Criteria 4. Macro Risks

4a. Parent Linkage Analysis 4a. Country Ceiling and Dependability of Legal Regime
4b. Structural Protection Analysis 4b. Industry Risks
4c. Additional Structural Elements 4c. Event Risks

5. Debt Structure
5a. Debt Characteristics and Terms
5b. Structural Features
5c. Derivatives and Contingent Obligations
5d. Security Package and Creditor Rights
5e. Refinance Risk

6. Debt Service and Counterparty Risk

6a. Models
6b. Base Case
6c. Project Stresses
6d. Financial Stresses
6e. Rating Cases, Combined Downside, and Break-Even Stresses
6f. Metrics
6g. Counterparty Risks
6h. Peer Analysis
6i. Surveillance

4 Clarity of Methodology for Assessment

1. Project and Infrastructure Debt Ratings
2. Instrument Ratings
3. Evaluate Cash Flow Stability
4. Evaluate Financial Structure
5. Evaluate Stress Scenarios
6. Typical Investment-Grade Attributes

Give Rating According Sub Criteria