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S&P Global Ratings Affirms Panama Canal’s 'A-' Ratings in Line with Expectations

Date: 08-AUG-2016

Panama City, Panama, August 8, 2016 - Standard & Poor's (S&P) Global Ratings affirmed its 'A-' long-term corporate credit and debt ratings of the Panama Canal Authority (ACP), reiterating the credit rating agency's trust in the management, operation and investments of the Panama Canal.
In their research update issued on August 4, 2016, S&P Global Ratings stated that the ACP's operating and financial performance remained in line with S&P's expectations. The ratings affirmation reflects S&P's expectation that following the Expansion, the ACP will benefit from sustainable traffic growth levels in the upcoming years amid a growing global economy and the Canal's larger capacity.

"We expect the Panama Canal operator to maintain its exceptionally strong competitive position, because it's the most economical and time-saving option for trade routes between Americas, Asia, and Europe," read the S&P Global Ratings Research Update. "The affirmation also reflects our expectation due to a very stable and predictable cash flow generation, which we attribute to the consistency of demand for the ACP's services."

In addition, S&P Global Ratings kept the ACP's '' stand-alone credit profile (SACP) unchanged, stating that the outlook on the corporate credit rating remains stable.S&P Global Ratings noted that this outlook reflects that the ACP will generate relatively stable annual earnings before interest, taxes, depreciation, and amortization (EBITDA) in the next two years that should allow it to post very strong credit metrics.

The Global Ratings come just over one month after the Inauguration of the Panama Canal Expansion Program. Since then, 88 vessels have transited the Expanded Canal, and 266 reservations have been received. The significant demand shown by the maritime industry reinforces the need for the Expansion, its future potential, and the benefits it brings to global commerce and the world's consumers.

About the Panama Canal Authority
The Panama Canal is run by an autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal. The operation of the Panama Canal Authority (ACP) is based on its organic law and the regulations approved by its Board of Directors. For more information, please refer to the ACP's website: http://www.pancanal.com or follow us on Twitter @thepanamacanal.

About the Panama Canal Expansion
The Panama Canal Expansion is the largest enhancement project since the Canal's opening in 1914. Considered and analyzed for a decade with more than 100 studies, the Expansion provides the world's shippers, retailers, manufacturers and consumers with greater shipping options, better maritime service, enhanced logistics and supply-chain reliability. The Expansion included the construction of a new set of locks on the Atlantic and Pacific sides of the waterway, creating a third lane of traffic and doubling the cargo capacity of the waterway. While the Expanded locks are 70 feet wider and 18 feet deeper than those in the original Canal, they use less water due to water-savings basins that recycle 60 percent of the water used per transit. In line with its commitment to customer service, the Panama Canal will continue to provide the world with value for another century and beyond.

 


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