Moody’s Investors Service upgraded the 20-year $450 million Senior Unsecured Bonds issued by the Panama Canal Authority (ACP) to A1 from A2, with a stable outlook, based on the waterway’s strong performance since the expansion’s inauguration.
Moody’s noted that the Expanded Canal has increased overall tonnage and attracted new market segments, contributing to the waterway’s strong performance. According to Moody’s, “stronger cash flow generation coupled with a relatively low leverage has resulted in very solid financial metrics.”
“This upgrade in the long-term rating is the result of the Panama Canal’s financial strength, its proven track record of institutional independence and successful governance that continue to be key to the waterway’s success,” said Panama Canal Vice President for Finance Francisco J. Miguez.
The credit rating agency noted that the rating “is one-notch above the A2 sovereign ceiling of Panama and three notches above the rating of the Government of Panama (Baa1 stable), implying low risk of moratorium restrictions and capturing the Canal’s very strong credit profile with a substantial international component of its revenues.”
In August 2018, Fitch Ratings affirmed the ACP ‘A’ investment grade rating with a stable outlook for its long-term issuer default rating and its senior unsecured notes. In July 2018, Standard & Poor’s (S&P) Global Ratings improved the Canal’s outlook from ‘stable’ to ‘positive,’ and also affirmed its ‘A-‘ rating of the waterway.