Moody's upgrades Navios notes, rates new notes B2

Moody's Investors Service said it assigned a provisional B2 rating to the proposed $350 million senior notes due 2022 to be issued by Navios South American Logistics Inc., affirmed the company's corporate family rating at B2 and upgraded its existing notes due 2019 to B2 from B3. The outlook is stable.

The proceeds from the new notes will primarily be used to refinance Navios' existing notes.

The agency said the affirmation of the company's B2 corporate family rating reflects that, in spite of leverage that was slightly higher than Moody's expectations for the B2 rating at the end of 2013, Moody's anticipates that Navios' financial profile will materially improve in the next 12 to 18 months.

The B2 corporate family rating continues to reflect the company's limited size in terms of revenues, geographical concentration, operating risk related to the implementation of its sizeble capital investment plan, exposure both to cyclical markets and to adverse weather conditions and risks related to operating in relatively politically unstable countries, such as Argentina, Moody's said.

More positively, the agency said the corporate family rating reflects Navios' relatively stable flow of revenues due to the large portion of contracted revenues generated by its business units; a reasonably diversified business from port terminal, barge and cabotage operations; a strong management team with a successful track record of operations in the region; and Navios' strong asset base.

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