Moody's cuts Lane Cove Tunnel to Ca

Moody's Investors Service said it downgraded the underlying senior secured rating of Lane Cove Tunnel Finance Co. to Ca from Caa1.

The outlook is negative.

The wrapped rating on the senior bonds is Baa1 and the outlook is developing, reflecting the claims paying ability of MBIA Insurance Corp.

The downgrade reflects increased concerns that the company is likely to be in default in the short-term due to the continued significant shortfall in traffic numbers relative to what is needed to service debt, Moody's said.

The rating reflects some prospects of recovery of principal and interest, the agency said. However, there is still a risk that recovery prospects could worsen if traffic numbers deteriorate in the next 12 months, Moody's added.

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