Fitch removes Entrevias debenture from watch

Fitch Ratings said it affirmed Entrevias Concessionaria de Rodovias SA’s R$1 billion second debentures issuance due in 2030 at BB-/AA-(bra) and removed them from rating watch negative. Also, Fitch assigned a negative outlook.

“The removal of the negative watch reflects better traffic performance than Fitch’s coronavirus-related impact scenarios. Second-quarter traffic reduction was 15.3% in comparison with the same period of 2019, while Fitch’s scenario included a fall of 50%,” Fitch said in a press release.

The outlook indicates the grantor’s ongoing delay in signing the amendment to rebalance the prohibition to charge lifted axles of heavy vehicles, after the May 2018 Brazilian truckers strike, Fitch said.

If the rebalancing is not settled in a way that preserves the cash balance within the concessionaire until 2024, Entrevias’ liquidity will be lower than expected, which would mean the projected loan life coverage ratio would no longer be in line with the ratings, the agency said.

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