S&P rates Panama Canal Railway notes BB

Standard & Poor's said it assigned a BB long-term corporate credit rating to the Panama Canal Railway Co. and a BB rating to the company's proposed $100 million senior secured notes due 2026.

The outlook is stable.

The agency said the ratings reflect Panama Canal Railway's aggressive financial profile, particularly its leveraged capital structure; its business profile, which considers the company's highly concentrated customer base mix; its strong dependence on the Panamanian ports' operating performance and berth-space expansion plans; and its exposure to customers' ongoing adjustments to their logistics strategies.

The ratings are supported by Panama Canal Railway's adequate sources of liquidity, strategic geographic location and the benefits from favorable concession terms that significantly limit the potential for new competition in the interoceanic rail sector in Panama, provide full flexibility to establish a rate structure and allow, at the company's option, a 25-year renewal at the expiration of the current term in 2023, S&P said.

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