MONTERREY, Mexico--(BUSINESS WIRE)--Fitch Ratings has reviewed the amendment to the concession title of Red de Carreteras de Occidente, S.A.B. de C.V. (RCO) with respect to the inclusion of the construction, operation, maintenance and preservation of a toll-free road located east of Jiquilpan. Fitch has determined the amendment to the title has no impact on the ratings of the following Fitch-rated issuances:
--RCO 12 'AAA(mex)'; Stable Outlook;
--RCO 12U 'AAA(mex)'; Stable Outlook;
--International bonds 'BBB-'; Stable Outlook.
The new road will have a length of 46 kilometers and will be located at the east of Jiquilpan, ending at the junction with the Maravatio - Zapotlanejo toll road, in the states of Michoacan and Jalisco, respectively. This amendment will allow RCO to extend the term of the concession by 4.5 years, until 2042. Additionally, once the construction phase of the new road is completed, the tariffs of highways Maravatio - Zapotlanejo, Zapotlanejo - Lagos de Moreno, Leon - Aguascalientes and Guadalajara - Zapotlanejo, collectively referred to as FARAC I, may be adjusted to reflect a weighted average increase of 2% in addition to the annual inflationary adjustment.
While the inclusion of this toll-free road to RCO's concession will generate additional operating and maintenance costs, it is expected such amounts to be minimal and not to have a significant impact on the project's cash flows. Conversely, the extension of the title's term will provide RCO with greater flexibility to continue the extensive refinancing program which begun in 2012.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Rating Criteria for Infrastructure and Project Finance' (July 12, 2012);
--'Rating Criteria for Toll Roads, Bridges, and Tunnels' (Oct. 16, 2013).
Applicable Criteria and Related Research:
Rating Criteria for Infrastructure and Project Finance
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=682867
Rating Criteria for Toll Roads, Bridges and Tunnels
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=720736
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