OREANDA-NEWS. According to Fitch Ratings, the recent bank loan contracted by Concesionaria Irapuato la Piedad, S.A. de C.V. (CONIPSA), a subsidiary of Red de Carreteras de Occidente S.A.B. de C.V. (RCO), with Banco Santander (Santander) and Banco Mercantil del Norte (Banorte) as part of its refinancing plan, will have no impact on RCO's ratings.

Fitch's opinion is based on the fact that the bank loan and the related swap coverage, allow CONIPSA to refinance its debt under better conditions than those of the original credit, as the term is almost five years longer and the interest rate is slightly lower. Although the refinancing is considered as positive for CONIPSA and RCO's cash flow, the impact is marginal for the latter, given that Fitch expects CONIPSA's future distributions to RCO to be minimal when compared to RCO's total revenue (around 3% in 2016).

The MXN266.8 million loan is quarterly amortized, matures in 2024 and is expected to accrue interest at variable rate plus a spread. It also has hedge for the variable interest rate with Banorte and Santander for the full loan term.

Loan proceeds were used to fully prepay the syndicated loan with Banco Nacional de Obras y Servicios Publicos (Banobras) and Banorte.