OREANDA-NEWS. The credit quality of Colombian corporates remains resilient despite a slowdown in the economy, according to Fitch Ratings' Colombian Corporate Outlook Report.

'Fitch's international-rated portfolio is performing well despite challenging economic conditions. Only Pacific Rubiales and Avianca have negative ratings biases,' according to Jorge Yanes, a Director at Fitch. 'Downgrades are projected to outpace upgrades by a very narrow margin in the next 12 months.'

The heavy weighting of the portfolio to the utilities sector has made the ratings more resilient to economic challenges. Tax increases on both corporates and individuals has stifled demand and presented headwinds for operating cash flow growth. Positively, the startup of several large projects in the energy and telecommunications sectors will boost operating cash flows of Isagen, Emgesa and ISA. Tariff adjustments authorized for the water, gas and energy sectors should also boost corporate cash flow.

The 49% local currency depreciation experienced during the last 12 months has been from neutral to negative for Fitch-rated corporates. From a balance sheet perspective, companies have only modest exposure to FX risk given their ability to obtain financing in the local debt market.

Fitch's Five Report Outlook series will be released one report per day as follows:

Aug. 17: Brazil Corporate Outlook Update -- Dark Days to Continue;
Aug. 18: Chile Corporate Outlook Update - Challenges Persist;
Aug. 19: Colombia Corporate Outlook Update - Resilient Credit Quality;
Aug. 20: Mexico Corporate Outlook Update - Slow but Steady;
Aug. 21: Peru Corporate Outlook Update -- Facing Hard Times.

The Colombian special report titled 'Resilient Credit Quality' is available on the Fitch Ratings web site at www.fitchratings.com.