Research Update: Rutas de Lima 'B-' Issue Rating Remains On CreditWatch Negative Pending Waiver From Bondholders

Rutas de Lima S.A.C. (RdL) recently received a favorable decision on its international arbitration filed against the Metropolitan Municipality of Lima (MML). RdL had petitioned the Court of Arbitration to include a dispute on the MML's termination of the concession agreement and to issue an injunction to suspend the termination while the dispute is being resolved. The court ruling orders the status quo be maintained until the issues related to the termination of the concession contract are resolved. Therefore, RdL will keep operating until a final decision is made, diminishing short-term uncertainties. However, pending expansion works on Panamericana Sur (PS) and Panamericana Norte (PN) will not be ready by the due date, Dec. 31, 2023, which will expose the project

...- Rutas de Lima S.A.C. (RdL) recently received a favorable decision on its international arbitration filed against the Metropolitan Municipality of Lima (MML). RdL had petitioned the Court of Arbitration to include a dispute on the MML's termination of the concession agreement and to issue an injunction to suspend the termination while the dispute is being resolved. The court ruling orders the status quo be maintained until the issues related to the termination of the concession contract are resolved. - Therefore, RdL will keep operating until a final decision is made, diminishing short-term uncertainties. However, pending expansion works on Panamericana Sur (PS) and Panamericana Norte (PN) will not be ready by the due date, Dec. 31, 2023, which will expose the project to a nonautomatic event of default if not attended or cured. - On June 30, 2023, S&P Global Ratings kept its 'B-' issue rating on RdL on CreditWatch with negative implications. - The CreditWatch negative reflects that we...

Research Update