Fitch rates LimakPort's notes BB-

Fitch assigned Limak Iskenderun Uluslararasi Liman Isletmeciligi AS's (LimakPort's) $370 million notes a rating of BB- with a stable outlook.

The BB- rating reflects LimakPort's role as trade enabler of diversified products in the fast-growing south-east Turkey region, its modern assets and infrastructure with designed capacity well above current volumes and fully amortizing debt.

Proceeds will mainly be used to fully repay its existing $288 million debt, acquire operational equipment, upstream cash to shareholders and fund liquidity accounts.

The final coupon on the notes is materially higher than that during the expected rating assignment, resulting in weaker debt service coverage ratio. The increased interest expense is somewhat mitigated by the inherent flexibility in renewal capex under reduced port throughput scenarios, such as under the Fitch Rating Case, where port volumes are noticeably lower than management's expectations.

Nevertheless, rating headroom remains limited as the increased debt service results in higher reliance on growth and hence heightened exposure to adverse changes in business or economic conditions over time.

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