Fitch Downgrades 2 Tranches of Notes Issued by Infu Trust.

CHICAGO -- Fitch Ratings has downgraded two tranches of notes issued by Infu Trust to 'BBB-' from 'BBB' and removed the ratings from Rating Watch Negative. The Rating Outlook is Negative.

The US$245 million in aggregate notes are secured by various income rights granted to Inmobiliaria Fumisa, S.A. de C.V. (Fumisa) at Terminal 1 of the Mexico City International Airport (MCIA). The US$245 million in total issuance reflects two pari passu tranches, one for US$180 million and the second for the UDI equivalent of US$65 million. Fitch has downgraded the transaction due to lower than expected collections and due to Fumisa's performance in its role as Servicer for the transaction. While Fitch recognizes the continued economic attractiveness of the underlying airport asset, lower passenger volumes could eventually impact transaction revenues given that they indirectly determine future retail lease rates. To date, revenues derived from parking, jet bridges, and taxi fees are below Fitch base case expectations. The latter revenue stream was expected to be removed from the transaction beginning in 2011. However, due to negotiations early in 2008, Fumisa surrendered their right to taxi fees in exchange for concessions on jet bridge revenue beginning in 2011.

The impact of this negotiation has strained liquidity in the medium term for the transaction. Prior to the renegotiated concession, Fumisa was to relinquish its rights to taxi fees and three jet bridges at the end of 2010. The transaction's amortization profile mimicked the expected drop in revenue and thus decreases by approximately 15% beginning in 2011. However, Fumisa agreed to cede rights to taxi fees in early 2008 in exchange for maintaining its control over the three specified jet bridges. The consequence of this exchange should not have a material impact on the transaction, however, it does exacerbate liquidity concerns in the next two years. Fitch's base case expectations assumed taxi fees in place through 2010. This revenue stream is now removed from the transaction at a time when debt-service payments are relatively high. Post 2010, revenues are expected to be higher than Fitch's base case as there will no longer be a loss of jet bridges, and the transaction should benefit from a front-loaded amortization schedule that lowers quarterly debt-service payments.

Fumisa's revenues are well diversified and approximately 85% are derived from rental payments of retail space secured by long-term leases. In the third and fourth quarters of 2008, collections from these tenants have also been below Fitch base case. Over 90% of leases are contractually written in US dollar terms. However, it is at the tenant's option to pay in dollars or in Mexican pesos at the spot exchange rate. The depreciation in the peso versus the dollar has contributed to the decline in collections in USD terms. Fumisa's management has also indicated that many tenants have been delinquent in their payments in anticipation of the peso gaining strength in the future. Fitch expects collections early in 2009 to be higher than expected due to late payers becoming current.

Fitch believes passenger volume ultimately determines the rate at which lease rollovers and new tenant contracts will be negotiated. Additionally, passenger traffic levels influence Fumisa's variable revenues, which stem from the use of parking lots and jet bridges. However, a majority of the commercial space is under long-term contracts with leases in place through the life of the transaction. Thus, declining traffic flow at Terminal 1 has only been a minor contributor to the overall decline in collections.

The drop in passenger flow at Terminal 1 of the MCIA can be directly attributed to the opening of the new international Terminal 2 at the MCIA, and to a lesser extent, global economic conditions that have impacted air travel. Terminal 2 became fully operational in February 2008 and is in use by major carriers such as Aeromexico, Delta, Continental, Lanchile, and Copa. While the Terminal 2 effect on passenger volumes was expected and quantified in Fitch's original analysis, the impact has been greater than anticipated.

One of the key credit metrics analyzed in this transaction is the Debt-Service Coverage Ratio. For the quarter ending in November 2008, data indicates that this ratio per the Indenture was below the level required to trigger an Early Amortization Event. Servicing reports have failed to address this event. Following an Early Amortization Event, excess cash, after paying debt-service and certain transaction expenses, would be applied to prepay principal on the notes. Per the Indenture cash that was trapped in a reserve account should have been released by the trustee for early capital payments. Fumisa management is discussing alternatives to rectify this potential event. The Negative Outlook reflects the potential early amortization event and liquidity concerns in the medium term that could be amplified if overall traffic at the airport were to decline significantly.

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