Moody's upgrades Panama Canal Railway

Moody's Investors Service said it upgraded Panama Canal Railway Co.’s senior secured notes due 2026 to Ba1 from Ba2 and revised the outlook to stable from positive.

The agency said the rating action reflects the full and sustainable recovery in container volumes handled by the company since the notable downturn in 2009, lower debt levels that have led to improved financial metrics and adequate levels of liquidity reserves.

The stable outlook reflects Moody’s expectations of steady but modest growth in container volumes, revenues and debt service coverage ratios for the next few years.

In the agency’s view, the company’s credit strengths are partially offset by the ultimate impact of the Panama Canal expansion on the shipping and ports industry and on the company’s performance and competitive position, as well as any changes that may arise from the new Panamanian Government.

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