S&P gives Montes de Maria notes AA

S&P said it assigned a preliminary AA rating to the Montes de Maria project’s planned COP 760 billion of senior secured fully amortizing fixed-rate notes due 2045.

The notes will be backed by revenues generated from toll collections of the Puerta de Hierro – Palmar de Varela toll road and payments from the Agencia Nacional de Infraestructura. The U. S. Development Finance Corp. will guarantee the notes for up to $350 million.

“In our view, the existence of a maximum U.S. amount or cap under the guarantee agreement exposes the bondholders to unexpected and large fluctuations of the Colombian peso and U.S. dollar. It's possible that the peso could appreciate against the dollar (or, conversely, should the dollar depreciate against the peso) to such an extent that the amount of the guarantee may not be sufficient to repay the debt service in full. Therefore, we consider that there are some limits in our "guarantee criteria" that don't permit us to capture all the benefits of the facility provided by DFC,” S&P said.

The outlook is stable, reflecting the view on the guarantor, which is the United States, the agency said.

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