Moody's rates Patrimonio Autonomo Baa3

Moody's Investors Service said it assigned a first time Baa3 rating to the proposed senior secured multi tranche/multi-currency notes to be issued by Patrimonio Autonomo Union del Sur with Concesionaria Vial Union del Sur SAS as co-obligor for up to $820 million.

The multi-tranche debt issuances will rank equally on the rights to the security package and expected cash flows of the Rumichaca-Pasto road concession in Colombia with final payment in 2041. Each tranche has been sized to meet its respective source of project revenues in both Colombian peso and U.S. currencies, of about two thirds and one third, respectively, hence mitigating foreign-currency exposure risk.

“The Baa3 rating considers the flexibility provided by the debt structure and the cash sweep provisions that reduce volatility in DSCR under different scenarios for traffic demand or price risk. A key credit consideration is the supportive Colombian 4G Concession Framework which encompasses availability payments (Vigencias Futuras or VFs), toll collections and traffic top-up payments (Diferencias de Recaudos or DRs). The VFs and DRs, which constitute obligations of the government of Colombia (Baa2, stable), materially offset the asset profile and lack of long track record on some sections,” Moody’s said in a press release.

The proceeds will be used to repay about $500 million in debt, to cover for swap breakage costs, and general corporate purposes, such as to fund the remaining construction costs and to support overall transaction fees and expenses, with remaining proceeds being made available to the shareholders via refinancing of shareholder loan and dividends.

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