News Column

Fitch Downgrades Inversiones Alsacia's Sr. Secured Bonds to 'D'

August 20, 2014

MONTERREY, Mexico--(BUSINESS WIRE)-- Fitch Ratings has downgraded to 'D' from 'CC' the rating of Inversiones Alsacia, S.A.'sUS$464 million senior secured bonds due in 2018. Currently, US$347 million of bonds are outstanding.

The rating downgrade reflects Alsacia's lack of payment of the debt service obligations due Aug. 18, 2014, which constitutes an Event of Default upon the notes' indenture, with no cure period or possibility for a waiver.

The concessionaire announced an agreement was achieved with a group of bondholders that collectively hold over 60% of the outstanding debt to restructure the notes and to forbear from pursuing any remedies under the indenture in connection with the default, for a four-day period that may be extended.

The latter, however, reflects the position of the bondholders of only a portion of the debt. As Fitch did not receive any further information but the concessionaire's notice published on Aug. 18, 2014, the agency ignores the position of those who hold the remaining 40% of the notes' balance.

Alsacia also received termination notices regarding the hedging agreements entered into with Merrill Lynch Capital Services Inc. and Credit Suisse International as a result of the concessionaire's failure to pay the respective fees.

In Fitch's view, the concessionaire's credit quality and performance was largely affected by the restatement of concession effective since May 2012. The restatement resulted in higher sensitivity to a declining passenger demand, insufficient compensation payments, tighter operational requirements and higher expenses. The combination of all these factors has significantly deteriorated Alsacia's liquidity and financial position.

Alsacia and Express are two bus concessionaires of the Transantiago System, which provides mass urban bus/metro transportation services to the City of Santiago, in Chile since 2005, and is regulated by the MTT. The transaction consisted of the acquisition by Alsacia of the remaining shares of Express, and the refinancing of all the existing debt of both concessionaires.

The notes are secured by a first lien interest of total revenues and contract rights, as well as all assets owned by Alsacia and Express, excluding a bus terminal located in Huachuraba.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Rating Criteria for Infrastructure & Project Finance' (July 11, 2012);

--'Rating Criteria for Availability-Based Projects' (June 18, 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 Availability-Based Projects

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=710784

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=854494

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. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Astra Castillo, +52(81)8399-9100

Director

Fitch Mexico, S.A. de C.V.

Prol. Alfonso Reyes 2612, Edificio Connexity

Monterrey, N.L. 64920

or

Secondary Analyst

Ivan Garcia, +56(2)2499-3329

Director

or

Committee Chairperson

Glaucia Calp, +57(1)326-9999

Senior Director

or

Media Relations:

Elizabeth Fogerty, +1 212-908-0526

elizabeth.fogerty@fitchratings.com

Source: Fitch Ratings


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Business Wire


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters