Credit rating agency Fitch Ratings recently rated P.A. Concesion Ruta Al Mar’s 522 billion Colombian peso senior secured notes due in 2044 at BBB- with a stable outlook. The notes also received an AA+(col) rating.
Earlier this month, Moodys Investor Service, another one of the so-called “big three” ratings agencies, assigned a Baa3 rating to the notes, which will in part fund the construction of the a toll road project that was originally awarded to the company in 2015 within Colombia’s massive “4G” roadway infrastructure overhaul program.
“Final pricing for the rated notes was a coupon of 6.75%,” stated the New York-based agency in a statement. “Projected metrics and breakeven analysis are consistent with Fitch’s cases at the time the expected ratings were assigned. The rated notes coexist on a pari-passu basis with a UVR-denominated loan and two Colombian peso-denominated loans, for a total amount of up to 950,000 million Colombian pesos, and maturities between 2027 and 2038.”
Fitch added that the ratings are a reflection of the “acceptable mitigation of completion” and “ramp-up risks” of the project to the issuing company. The long-term view is also affected by an expected increase in traffic on the throughway over time and the fact that the company will be able to adjust the toll rates based upon inflation.
According to Fitch Ratings, “despite some back-loading” the debt structure of the project is “adequate.” This has led the agency to conclude that, although financial metrics are “initially weak for the rating category,” the full life of concession is supported by “growing flexibility, a high project life coverage ratio (PLCR). and a rapidly increasing loan life coverage ratio (LLCR), according to the applicable criteria.”