TEXT-Fitch affirms Maxseguros EPM's IFS rating at 'BBB'

Nov 27 - Fitch Ratings has affirmed Maxseguros EPM Ltd's Insurer Financial
Strength (IFS) rating at 'BBB'.

The Rating Outlook is Stable.

The rating reflects the strategic importance of Maxseguros EPM for Empresas
Publicas de Medellin E.S.P. EPM (the parent). This captive reinsurance company
is a core subsidiary in charge of managing the risks and structuring the
insurance coverage for EPM Group. In addition, Maxseguros continues to have a
non-retention risk policy, limited exposure of its equity, investment portfolio
with high quality and liquidity, and comfortable leverage ratios.

Maxseguros is considered a core subsidiary of EPM due to its tight linkage with
EPM's Risk Management department. Besides, there is a formal business
partnership agreement between EPM and the captive that provides rights and
obligations to both parties and the resources necessary for the optimal
operation of the captive, especially in regards to investments, human resources,
and corporate governance.

Empresas Publicas de Medellin (EPM) has a Fitch rated Local Currency Issuer
Default Rating (IDR) of 'BBB' with a Stable Outlook. EPM's ratings reflect the
company's low business risk resulting from its business diversification and
characteristics as a utility service provider. EPM provides electricity, water
and sewage water, natural gas distribution services as well as electric
generation and telecommunication services. The company's ratings also reflect
its solid credit protection measures supported by low leverage, healthy interest
coverage and strong liquidity position.

Maxseguros has demonstrated a continued strengthening of capital. As Sept. 30,
2012 Maxseguros capital increased in USD 14.5 million in order to comply with
the Colombian Superintendence to get the authorization to operate as a direct
reinsurer. As a result, leverage ratio measured as liabilities to equity
declined to 1,1x as Sept. 30, 2012 from 2.1x as Sept. 30, 2011.

Maxseguros profitability is adequate to its business profile. As of Sept. 30
2012, Maxseguros increased its net income to USD1.9 million from USD1.0 (Sept.
30, 2011) due to higher ceding commissions mainly coming from its participation
in the security program of Ituango's construction all risk coverage and the
management risk fee agreed with EPM. Maxseguros doesn't retain any risk on this
policy and cedes 100% to a reinsurance pool with high and strong quality.

Liquidity ratios are strong. The company places its deposits in financial
institutions with good credit quality and also has marketable investments in
funds concentrated in fixed income investments. As Sept. 30, 2012 the coverage
ratio of liquid assets over reserves stood at 1.7x and compares favourably with
the industry.

Key rating triggers that may lead to a downgrade include negative changes in
availability and willingness of 'Empresas Publicas de Medellin' to provide
support. An upgrade may be considered with positive changes in the credit
profile of the Parent.

Additional information is available at 'www.fitchratings.com'. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

Applicable Criteria and Related Research:
--'Insurance Rating Methodology' (Oct. 18, 2012).

Applicable Criteria and Related Research:
Insurance Rating Methodology - Amended