Fitch affirms Kansas City Southern de Mexico

Fitch Ratings said it affirmed Kansas City Southern de Mexico SA de CV's B+ foreign- and local-currency issuer default ratings and the B+ foreign-currency ratings with recovery ratings of RR4 assigned to the company's $150 million notes due 2007, $178 million notes due 2012 and $460 million notes due 2012.

The outlook is stable.

The agency said the ratings are supported by the company's solid business position as a leading provider of railway transportation services in Mexico with a diversified revenue base consisting of five main industrial sectors.

While operating earnings have improved in 2006, the ratings continue to reflect Kansas City Southern de Mexico's weak financial profile due to its high leverage and tight liquidity. Fitch said that over the past several years, the company has operated in a challenging environment characterized by fierce competition, higher fuel costs, a depreciating Mexican peso versus the dollar and a general shift in manufacturing to China from several countries including Mexico. As of June 30, total debt to EBITDAR was 4.5x.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.