Research Update: Rutas de Lima S.A.C. 'B-' Issue Rating Remains On CreditWatch Negative On Expected Cash Deficit

Between January and November 2023, the traffic level of Rutas de Lima S.A.C. (RdL or the project) dropped 2.6% from the same period in 2022, mainly due to protests in Lima and lower-than-expected economic growth in Peru. We forecast our debt service coverage ratio (DSCR) to drop below 1x by December 2024, and we expect the project to use its reserve accounts to fulfill the shortfall, assuming no toll adjustment and no traffic growth for 2024, below our previous expectation of 2%-3%, considering still relatively low growth in the economy. On Jan. 8, 2024, S&P Global Ratings kept its 'B-' issue rating on RdL on CreditWatch with negative implications. We initially placed the rating on CreditWatch on Feb. 10, 2023.

...- Between January and November 2023, the traffic level of Rutas de Lima S.A.C. (RdL or the project) dropped 2.6% from the same period in 2022, mainly due to protests in Lima and lower-than-expected economic growth in Peru. - We forecast our debt service coverage ratio (DSCR) to drop below 1x by December 2024, and we expect the project to use its reserve accounts to fulfill the shortfall, assuming no toll adjustment and no traffic growth for 2024, below our previous expectation of 2%-3%, considering still relatively low growth in the economy. - On Jan. 8, 2024, S&P Global Ratings kept its 'B-' issue rating on RdL on CreditWatch with negative implications. We initially placed the rating on CreditWatch on Feb. 10, 2023. - The CreditWatch negative reflects a 50% chance that we could lower the rating in the short term if we do not see an improvement in our projected DSCR for the year to 1x or above, fueled by either a toll adjustment or traffic levels improving more than we expect. Moreover,...

Research Update