Outlook On Two Panamanian Infrastructure Entities Revised To Positive On Similar Sovereign Action

Stocks and Financial Services Press Releases Wednesday July 4, 2018 17:23
MEXICO CITY--4 Jul--S&P Global Ratings

MEXICO CITY (S&P Global Ratings) July 3, 2018--S&P Global Ratings revised the outlook on Autoridad del Canal de Panama (ACP) and on Aeropuerto Internacional de Tocumen's debt rating to positive from stable. We also affirmed our 'A-' ratings on ACP and our 'BBB' issue-level ratings on Tocumen.

The outlook revision on ACP reflects our view that it will continue to be rated at the maximum number of notches above the sovereign foreign currency rating due to ACP's intrinsic credit factors, sensitivity to country risk, and liquidity cushion under the sovereign stress tests that we run for an entity whose rating is above that on the sovereign. Therefore, while all other factors remain equal, a potential sovereign upgrade would cause the same rating action on ACP. We already disclosed our rationale of how many notches ACP could be rated above the sovereign in the most recent publishing report (please see "Autoridad del Canal de Panama 'A-' Ratings Affirmed On Expectations of Strong Financial Performance; Outlook Stable," dated July 26, 2017).

The outlook revision on Tocumen reflects a potential upgrade if we were to raise our ratings on Panama to 'BBB+'. Even if Tocumen's 'bbb' project stand-alone credit profile remains unchanged, we expect that after a sovereign rating improvement, and given the strong relationship from a qualitative standpoint with it, the rating on Tocumen will follow an identical pattern.

Finally, the conversion of the rating on Tocumen's $225 million amortizing senior notes due 2048 to final from preliminary follows our revision of the executed version of the documentation associated to the issuance. All characteristics included in our previous analysis remain in line with our expectations.


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