Research Update: Rutas de Lima S.A.C 'CCC' Rating Remains On CreditWatch Negative Amid Suspension Of Toll Collections

In May 2020, Peru's Congress approved the law that suspended toll collections on all highways in the country, which will remain in place as long as the state of national emergency continues, which as of today will remain until June 30, but could be extended. The suspension doesn't contemplate any compensation mechanism for the non-toll collections. As a result and despite the better-than-expected traffic performance in the past two months, we revised our forecast on Rutas de Lima's (RdL or the project) of a drop in revenue to about 40% in 2020 from 30% previously, which leads to further deterioration in its financial performance. Nevertheless, we still believe the project has sufficient liquidity to cover the forecasted shortfall during 2020.

...- In May 2020, Peru's Congress approved the law that suspended toll collections on all highways in the country, which will remain in place as long as the state of national emergency continues, which as of today will remain until June 30, but could be extended. The suspension doesn't contemplate any compensation mechanism for the non-toll collections. - As a result and despite the better-than-expected traffic performance in the past two months, we revised our forecast on Rutas de Lima's (RdL or the project) of a drop in revenue to about 40% in 2020 from 30% previously, which leads to further deterioration in its financial performance. Nevertheless, we still believe the project has sufficient liquidity to cover the forecasted shortfall during 2020. - Therefore, on June 22, 2020, S&P Global Ratings kept its '###' issue-level rating on RdL on CreditWatch with negative implications, where we placed it on March 31, 2020. - The CreditWatch negative listing reflects a 50% chance of a downgrade...

Research Update