Mexican toll road operator Red de Carreteras de Occidente (RCO) has agreed a modification of its concession agreement including the construction, operation, maintenance and preservation of a new toll-free road located east of Jiquilpan.
The new road will have a length of 46km and will be located at the east of Jiquilpan, ending at the junction with the Maravatio - Zapotlanejo toll road, in the states of Michoacan and Jalisco, respectively. This amendment will allow RCO to extend the term of the concession by 4.5 years, until 2042.
Fitch Ratings has reviewed the changes agreed for RCO. Fitch has determined the amendment has no impact on the ratings of the following Fitch-rated issuances: RCO 12 'AAA(mex)'; stable outlook, RCO 12U 'AAA(mex)'; stable outlook, and international bonds 'BBB-'; stable outlook.
According to Fitch Ratings, the inclusion of this toll-free road to RCO's concession will generate additional operating and maintenance costs, but it is expected such amounts to be minimal and not to have a significant impact on the project's cash flows.
In June 2013, we reported that Empresas ICA, the largest infrastructure and construction company in Mexico, sold its 18.7% stake in RCO, the concessionaire for approximately 760 km of highways in Mexico to funds managed by Goldman Sachs Infrastructure Partners. Those funds already own 70 % of Red de Carreteras de Occidente.
RCO is the company behind the construction, operation and maintenance of several concessioned highways in Mexico.The firm is based in Guadalajara, Mexico.
RCO operates the following road stretches: