Moody’s Chops Vespucio Norte on Traffic Drop

Moody’s downgraded the ratings of Chile highway developer Sociedad Concesionaria Vespucio Norte to Ba1 from Baa3 to reflect worse than expected financial results. The ratings have been placed on review for further downgrade. Moody’s blames poor results on traffic figures that continue to fall below original projections. Slower than expected ramp up is in part due to delays in construction and opening of the San Cristobal Tunnel, as well as various other delays in construction, which coupled with even relatively moderate reduction in traffic brought about by the global economic crisis results in cash flows that are insufficient to cover scheduled debt service. May 20, S&P downgraded the company to BB from BBB minus with stable outlook because of weak traffic figures and worse than expected financial results.