Rating action affects approximately US $380 million of debt outstandingMexico, October 16, 2013 -- Moody's Investors Service has downgraded the senior secured rating of Inversiones Alsacia S.A. to Caa2 from B2. The rating continues on review for possible downgrade. The downgrade reflects the project's greater likelihood of default in the near to medium term as evidenced by the project's: a) breach of covenants pertaining to minimum debt service coverage ratios and maintenance of required balances in O&M and Overhaul Accounts, which could trigger early amortization or an event of default, b) underfunded debt service reserve account which is expected to be depleted on the next coupon payment due February 2014, increasingly exposing the transaction to a default, c) increasing dependence on compensation for concession amendments and for lower passenger demand to meet debt service payments, and d) extremely tight expected cash flows available for debt service payments going forward. The rating also incorporates the fact that the offer of the sponsor (Grupo GPS, unrated) to contribute funds to the project either via an equity contribution or subordinated debt to partially fund the upcoming debt service payment is conditioned upon consent by bondholders to a recent waiver request and is very limited in amount.

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