Moody's cuts Ostregion bonds, loan

Moody's Investors Service said it downgraded the ratings for €425 million of senior secured bonds and the €350 million senior secured European Investment Bank loan raised by Ostregion Investmentgesellschaft Nr.1 SA to B3 from B2.

The outlook is negative.

Moody's said the action was prompted by (a) Moody's expectation that the issuer is unlikely to benefit from a minimum traffic guarantee from Autobahnen-Und Schnellstraben-Finanzierungs AG and therefore could be fully exposed to traffic volume risk; (b) the rating agency's expectation that the issuer's annual debt service coverage ratios will remain very weak over the medium term, possibly below the 1.05x default level; and (b) the issuer's dependence on the controlling creditors' willingness to waive a default given that annual debt service coverage ratio for 2012 was above 1.0x but below the 1.05x default level.

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