Research Update: Autopistas Metropolitanas de Puerto Rico LLC's New Notes Rated Preliminary 'BBB-'; Existing Bond Rating Affirmed

We affirmed the 'BBB-' rating with a negative outlook on existing bonds and assigned private preliminary 'BBB-' rating with a negative outlook for new $181 million private placement notes due 2038 that are being used to partially refinance the term loan A, due 2022. Autopistas has performed in line with our financial forecast, despite the devastation of Hurricane Maria in 2017. Traffic and toll-road revenues for 2018 are closely tracking our base case and credit metrics continue to support the rating because the project is steadily deleveraging. The negative outlook reflects uncertainty about whether the toll road can continue to attract users and pass on future toll-rate increases, which will depend on the island's ability to resuscitate its flagging economy.

...+ We affirmed the '###-' rating with a negative outlook on existing bonds and assigned private preliminary '###-' rating with a negative outlook for new $181 million private placement notes due 2038 that are being used to partially refinance the term loan A, due 2022. + Autopistas has performed in line with our financial forecast, despite the devastation of Hurricane Maria in 2017. Traffic and toll-road revenues for 2018 are closely tracking our base case and credit metrics continue to support the rating because the project is steadily deleveraging. + The negative outlook reflects uncertainty about whether the toll road can continue to attract users and pass on future toll-rate increases, which will depend on the island's ability to resuscitate its flagging economy. We have assumed flat traffic transactions after 2022, but a further downward revision in our traffic forecast in the range of 15% could trigger a downgrade....

Research Update