Fitch Removes Senda From Negative Review

Fitch has affirmed Grupo Senda’s B minus rating and removed it from watch negative, assigning a stable outlook. The agency cites the turnaround in the Mexico-based passenger transportation company’s operating and financial performance beginning in H209, as well as the improving business and economic environment in Mexico. It expects Senda to continue to benefit from improvements in the Mexican economy, which is expected to grow at least 4% this year, after a contraction of 6.5% in 2009. Ebitda for the first, second, third, and fourth quarters of 2009 reached MXP81m, MXP94m, MXP167m, and MXP187m, respectively. Ebitda improvement was driven by tariff increases of approximately 20% in H209 and resulted in margins of over 20%. However, Fitch says the cash position remains weak. As of December 31, Senda had MXP146m of consolidated cash and marketable securities and MXP375m in short-term debt. Additionally, Fitch says total net debt/Ebitdar increased to 5.5x as of December 31, from 4.7x at end-2008. Fitch expects the company to keep net-debt-to-Ebitdar around 4.0x-5.0x over the next 2 years.