Research Update: Rutas de Lima S.A.C. Debt Rating Lowered To 'CCC+' From 'B-' Following Toll Suspension At Chillon; Outlook Negative

The Constitutional Court of Peru recently issued a final judgement against Rutas de Lima S.A.C. (RdL or the project) on the Chillon toll dispute and ordered the project to suspend collections at the Chillon toll plaza, located along the Panamericana Norte (PN) road. Although we already considered the temporary exclusion of those toll collections from our base case following the Court of Lima's precautionary enactment, considering the latest developments, we now permanently reduce the project's revenues from PN. Therefore, we forecast RdL will post a debt service coverage ratio (DSCR) close to 0.9x by December 2024, down from our previous expectation of 1.2x. Moreover, we expect the project will deplete its reserve accounts, absent changes, by 2030. On March 15,

...- The Constitutional Court of Peru recently issued a final judgement against Rutas de Lima S.A.C. (RdL or the project) on the Chillon toll dispute and ordered the project to suspend collections at the Chillon toll plaza, located along the Panamericana Norte (PN) road. - Although we already considered the temporary exclusion of those toll collections from our base case following the Court of Lima's precautionary enactment, considering the latest developments, we now permanently reduce the project's revenues from PN. Therefore, we forecast RdL will post a debt service coverage ratio (DSCR) close to 0.9x by December 2024, down from our previous expectation of 1.2x. Moreover, we expect the project will deplete its reserve accounts, absent changes, by 2030. - On March 15, 2024, S&P Global Ratings lowered its issue-level rating on RdL to '###+' from 'B-' and removed it from CreditWatch with negative implications. - The negative outlook reflects a one-in-three chance of a further downgrade in...

Research Update