S&P: Senda outlook negative

Standard & Poor's said it revised the outlook on Grupo Senda SA de CV to negative from positive and affirmed the B+ long-term corporate credit rating.

The outlook revision reflects increased competitive environment in the bus transportation sector, which hurt Senda's profitability in the third quarter, according to the agency.

The rating reflects the highly competitive bus transportation market, Senda's high leverage resulting from its acquisition of Transportes del Norte and the company's low organic growth and somewhat small size, the agency noted.

These weaknesses are balanced by Senda's strong position in Northeastern and Central Mexico and its young fleet life, which provides flexibility to defer investments and operational efficiencies, the agency said.

At the end of 2008, Senda is expected to post a total debt-to-EBITDA ratio close to 4x, compared with 3.3x for 2007.

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