S&P drops Lane Cove to CC

Standard & Poor's said it lowered the rating on A$1.14 billion senior secured bonds issued by Lane Cove Tunnel Finance Co. Pty Ltd. to CC from B- and removed the rating from CreditWatch with negative implications, where it was placed on May 1.

The outlook is negative.

S&P said the downgrade comes after stakeholders were unable to secure the expected recapitalization of the toll-road project and recognizes increased reliance on MBIA to meet future debt-service payments.

The CC rating reflects an opinion that free cash flow generated from the toll road cannot support the project's current debt repayments, which are reliant on cash reserves, according to the agency.

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