S&P: TFM on watch positive

Standard & Poor's said it placed its B long-term corporate credit rating on TFM SA de CV on CreditWatch positive following Kansas City Southern's announcement that it has reached an agreement with Grupo TMM SA to take control of TFM.

S&P said the CreditWatch Positive listing for TFM means that the ratings could be raised or affirmed based on the possibility that its financial or business profile could be enhanced if the merger is completed.

Until the acquisition takes place, S&P said the rating reflects TFM's low cash-flow generation, financial policy driven by TMM, high fuel prices, underperformance of the automotive industry and unresolved value-added tax and government put option.

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