Moody's cuts Lane Cove Tunnel

Moody's Investors Service said it downgraded the underlying senior secured rating of Lane Cove Tunnel Finance Co. to B2 from Ba3. The rating is on review with direction uncertain.

The rating on its senior bonds remains Aaa, on review for possible downgrade, reflecting the rating of MBIA Insurance Corp., which is rated Aaa, also on review for possible downgrade.

The downgrade comes after continued lower-than-forecast traffic volumes for May, Moody's said, even though traffic volumes were up slightly on figures for March and April.

Moody's said it does not currently believe that traffic volumes will increase to sufficient levels for the company to service debt at current levels.

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