Fitch Places Two OHL Sponsored Toll Road Debt Transactions on Negative Watch

Fitch Ratings has placed the following two toll road transactions sponsored by OHL Mexico on Rating Watch Negative: Concesionaria Mexiquense (Conmex) and Grupo Autopistas Nacionales (Gana).

The affected debt issuances are:

Conmex's debt:

--UDI1.6 billion notes due 2035 rated 'BBB' and 'AAA(mex)';

--UDI0.6 billion zero-coupon notes due 2046 rated 'BBB' and 'AAA(mex)';

--MXN6.5 billion Goldman Sachs loan due 2027 rated 'BBB' and 'AAA(mex)';

--UDI1.5 billion local market notes rated 'AAA(mex)'.

Gana's debt:

--UDI370 million local market notes rated 'AA+(mex)'.

The rating actions reflect the growing investigation of alleged illegal activities involving OHL's Mexico operations (sponsor) and concessions. The Ministry of Communications and Transportation (SCT) has ordered the Ministry of Civil Service to conduct audits on existing contracts with OHL Mexico.

The investigation is in its early stages and it will take some time to get final resolution. In addition, Fitch believes the ultimate outcome of the investigation and its impact on the existing toll road transactions could vary significantly. In case alleged OHL Mexico illegal activities are confirmed by authorities and linked to the concessionaires, the credit quality of rated obligations could be materially impacted, depending on the nature and extent of the measures taken by authorities.

While at this stage in the investigation it is difficult to predict a final resolution, Fitch believes that some adverse outcomes are possible. Fitch will monitor the developments of the investigation and update its ratings accordingly.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Rating Criteria for Infrastructure and Project Finance' (July 11, 2012);

--'Rating Criteria for Toll Roads, Bridges and Tunnels' (August 20, 2014).

Applicable Criteria

Rating Criteria for Infrastructure and Project Finance [682867 - 12-JUL-2012] (pub. 12 Jul 2012)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=682867

Rating Criteria for Toll Roads, Bridges and Tunnels [758708 - 20-AUG-2014] (pub. 20 Aug 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=758708

Additional Disclosures

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=985619

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts:

Fitch Ratings
Primary Analyst:
Astra Castillo, +52-81-8399-9100
Director
Fitch Mexico S.A. de C.V.
Prol. Alfonso Reyes 2612
Monterrey, Mexico 64920
or
Secondary Analyst:
Alberto Santos, +1-212-908-0714
Senior Director
or
Committee Chairperson:
Glaucia Calp, +57-1-326-9999
Senior Director
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
elizabeth.fogerty@fitchratings.com

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