S&P changes Panama Canal Railway view to negative

S&P said it revised the outlook for Panama Canal Railway Co. to negative from stable and affirmed the company’s BB- ratings.

“The negative outlook on PCRC reflects our view that macroeconomic weakness in the next 12 months could lead the company to post a sharp revenue and EBITDA decline beyond our current expectations, pressuring the company's credit metrics and liquidity,” the agency said in a press release.

“Our revised scenario assumes a double-digit decline in PCRC's total freight volume by about 15%-20% in 2020, with particular shrinkage in the second part of the year. In our view, this would weaken PCRC's capacity to generate revenue and EBITDA and will pressure the company's key credit metrics, raising its debt to EBITDA towards 3.0x and lowering its FFO to debt below 30% in 2020,” S&P said.

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