Fitch cuts Inversiones Alsacia bonds to B

Fitch Ratings said it downgraded the rating for Inversiones Alsacia, SA's $464 million senior secured bonds due in 2018 to B from BB.

The rating remains on negative watch. Currently, $405 million is outstanding.

Fitch said the downgrade reflects heightened transaction risks due, to a great extent, to the structure of the new concession contract of May 2012, which substantially differs from that of the original 2005 agreement by being much more linked to a contracted passenger demand and by requiring higher operational standards.

This model has resulted in large investments and cost escalations that have not been adequately compensated, resulting in increased pressure over cash flow and debt coverage ratio, the agency said.

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