S&P puts Autopistas Metropolitanas on watch

S&P said it placed the BBB- rating on Autopistas Metropolitanas de Puerto Rico LLC's $435 million senior secured notes due 2035 on CreditWatch with negative implications.

The BBB- rating on the project reflects the toll road's long operating history, steady historical revenue growth that has continued as the island's economic profile has declined, limited competition and the operator's experience, S&P explained.

The project has volume risk, the agency said, as well as refinancing risk in 2022 related to its bank loan, which is not rated.

Puerto Rico's economic situation is dire and there are significant policy decisions that are pending related to more than $73 billion in commonwealth debt that needs to be restructured, insufficient jobs (particularly private sector), outmigration, lack of private investment, inefficiency among government jobs, health care and public pension underfunding, S&P said.

The project relies on toll revenues from users of the road rather than government availability or other payments, the agency added.

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