Fitch: No Rating Impact from Red de Carreteras de Occidente's New Line of Credit

MONTERREY, Mexico--()--Fitch Ratings has reviewed the terms and conditions of the non-revolving Capex facility contracted by Red de Carreteras de Occidente, S.A.B. de C.V. (RCO) and determined it has no impact on the ratings.

While the disposal of this line will raise RCO's level of leverage, the increase in total debt is minimal, of about 2.9%. Since, under Fitch's base case, the service of this new credit will represent on average 3% of projected income over the five years constituting the repayment period, no significant effect on coverage is observed. By contrast, in Fitch's view, the use of the line will provide more flexibility to cash flow available to service the rated debt, by allowing RCO to differ its capital expenditures between several periods.

The Capex facility was formalized with Banco Santander for MXN1 billion and will accrue interest at a variable rate, which will be covered by derivative instruments. The proceeds can only be used to cover major maintenance expenses and/or issuance expenses deriving from the credit. The line will be available for disposals until 2016 and will be amortized between 2017 and 2021.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Rating Criteria for Infrastructure and Project Finance' (July 12, 2012);

--'Rating Criteria for Toll Roads, Bridges, and Tunnels' (Oct. 16, 2013).

Applicable Criteria and Related Research:

Rating Criteria for Infrastructure and Project Finance

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=682867

Rating Criteria for Toll Roads, Bridges and Tunnels

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=758708

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Contacts

Fitch Ratings
Primary Analyst
Astra Castillo
Director
+52 (55) 5955-1611
Fitch Mexico S.A. de C.V.
Prol. Alfonso Reyes 2612
Monterrey, N.L.
or
Jorge Torres
Analyst
+52 (81) 8399-9139
or
Media Relations, New York
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Astra Castillo
Director
+52 (55) 5955-1611
Fitch Mexico S.A. de C.V.
Prol. Alfonso Reyes 2612
Monterrey, N.L.
or
Jorge Torres
Analyst
+52 (81) 8399-9139
or
Media Relations, New York
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com