Fitch puts Red de Carreteras on positive watch

Fitch Ratings said it placed the BBB rating on Red de Carreteras de Occidente, SAB de CV's Ps. 7.5 billion senior secured notes on Rating Watch positive following news that the company is seeking to refinance the notes issued in 2012 in Mexico's local market.

If the refinancing of the local notes is successful, it is expected the new amortization calendar would lead to a significant improvement in the debt service coverage ratios between 2019 and 2024, when the lower metrics are projected, Fitch said.

A more robust and stable coverage profile would correspond to a higher rating as long as the current country's political and macroeconomic conditions support that view, the agency explained.

The ratings reflect the project's resilient traffic base and its strategic location, connecting several major cities in the central part of Mexico, the agency said.

The ratings also are supported by a satisfactory rate-setting mechanism, which allows for tariffs to be adjusted annually by inflation, Fitch added.

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