Research Update: Rutas de Lima Downgraded To 'CCC' From 'B' On Expected Worsening Of Financial Performance, Placed On Watch Negative

On March 15, 2020, the Peruvian president declared a state of national emergency, which among other things banned the free circulation of vehicles to prevent the coronavirus from spreading further across the country. Although it was extended until April 12, we expect it will last at least until mid-May, with an overall lockdown of about two months. Consequently, we revised Rutas de Lima's (RdL or the project) forecasts, and now include a traffic reduction of about 30% in 2020, which leads to a debt service coverage ratio (DSCR) of about 0.5x, indicating a further worsening of its financial performance and an increasing risk of default in the short term. On March 31, 2020, S&P Global Ratings lowered its issue-level rating

...- On March 15, 2020, the Peruvian president declared a state of national emergency, which among other things banned the free circulation of vehicles to prevent the coronavirus from spreading further across the country. Although it was extended until April 12, we expect it will last at least until mid-May, with an overall lockdown of about two months. - Consequently, we revised Rutas de Lima's (RdL or the project) forecasts, and now include a traffic reduction of about 30% in 2020, which leads to a debt service coverage ratio (DSCR) of about 0.5x, indicating a further worsening of its financial performance and an increasing risk of default in the short term. - On March 31, 2020, S&P Global Ratings lowered its issue-level rating on RdL to '###' from 'B' and placed the rating on CreditWatch with negative implications. - The CreditWatch negative reflects a 50% chance of a further downgrade in the next few months if we continue to see a deterioration of the liquidity conditions in light of the...

Research Update