NEW YORK--(BUSINESS WIRE)--The outlook for Latin America infrastructure is stable in 2012, reflecting the ongoing favorable demand dynamics despite the backdrop of a weaker U.S. economic recovery and concerns over Europe, according to Fitch Ratings.
The outlook encompasses the toll road, airport, social and availability and power segments of the infrastructure sector, each of which individually has a stable outlook.
Fitch expects regional growth to drive demand for infrastructure expansion through Latin America. In Brazil, the 2014 World Cup and 2016 Olympic Games is further boosting infrastructure investment. Even in the event of a 'hard landing in China' or a double dip recession in the U.S., Fitch expects ratings in larger economies in the region to be relatively resilient.
Increasingly open societies and reliable monetary and fiscal policies favorably well position transportation and energy projects given population growth and latent demand for basic public services. These factors are also bolstering counterparty strength in these sectors, underscoring the stability of assets exposed to third-party credit risks.
Interest rate increases pose a potential risk given the long-term fixed rate debt financing nature of most Fitch-rated infrastructure projects, although Fitch expects the major economies to continue a trend of fiscal discipline, keeping financing costs relatively stable. Fitch also believes that higher inflation in the near term is not a major concern for infrastructure projects.
The full '2012 Outlook: Latin America Infrastructure' is available at 'www.fitchratings.com.' The report provides specific outlook commentary for each of the aforementioned infrastructure segments.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: 2012 Outlook: Latin America Infrastructure (A Drive for Efficient Transportation and Energy Platforms)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=660191
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.