Moody's eyes Ruta al Mar for downgrade

Moody's Investors Service said it placed the Baa3 rating of the series A COP 522 billion of senior secured UVR indexed notes due 2044 issued by Fideicomiso PA Concesion Ruta al Mar with Concesion Ruta al Mar SAS as co-obligor (the project) on review for downgrade. Previously, the outlook was stable.

“Today's action reflects the lack of clarity on the timing and form in which the government of Colombia (Colombia; Baa2 stable), through the Agencia Nacional de Infrastructura (ANI), will compensate for the tariff freeze that was implemented at the beginning of 2023.

“The review will focus on the concessionaire's ability to mitigate lost revenues in 2023 and will also consider whether there will be further interference on the annual tariff increase by inflation expected at the beginning of 2024. Moody's captures exposure to adverse government interference in tariffs due to public concern over affordability as a customer relations risk. As such, social considerations were material for this credit rating action,” the agency said in a press release.

However, the agency noted “Partially mitigating the delays on tariff adjustments are RaM's strong credit fundamentals with traffic catching up with the original expectations and the protections embedded in the concession and debt agreements. Traffic performance has been gradually recovering following the Covid-19 impact. While the toll road traffic is still behind the original consultant scenario from 2017, traffic has performed stronger than Moody's base case.”

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