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Prospect News home > News index > List of issuers L > Headlines for Lane Cove Tunnel Finance Co. Pty. Ltd. > News item |
S&P cuts Lane Cove bonds to B-
Standard & Poor's said it lowered the A$1.14 billion senior secured bonds issued by Lane Cove Tunnel Finance Co. Pty Ltd. (AA/Watch negative) to B- from BB-.
The rating remains on CreditWatch with negative implications, where it was placed on May 1.
S&P said the downgrade reflects concerns about increased pressure on project liquidity, driven by systemic underperformance of the Lane Cove toll road and the increased administrative and funding costs incurred.
The affirmation of the AA rating reflects the benefit of bond insurance provided by MBIA Insurance Corp. (AA/Watch negative), according to the agency.
"Based on the toll road's current financial performance, unless recapitalized, we believe that the project will default some time over the next 10 to 16 months," S&P analyst Philip Grundy said in a written statement.
"The timing of default will depend on a number of factors, in particular traffic performance over the intervening period," the analyst said.
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