Fitch lowers Milano Serravalle-Milano

Fitch Ratings said it downgraded Milano Serravalle-Milano Tangenziali’s senior unsecured long-term debt rating to BB+ from BBB- and placed it on Rating Watch negative.

The downgrade reflects the company’s increased exposure to risks related to Pedemontana, a financially-strained €5 billion greenfield project run by its 79%-owned subsidiary, Autostrada Pedemontana Lombarda SpA.

This increased exposure stems from the company’s recent decision to fully cover Autostrada Pedemontana Lombarda’s financial needs over 2014 to early 2015, Fitch said.

The agency said it believes this additional support materially weighs on Milano’s financial viability.

The downgrades also consider the expected further weakening of Milano’s debt structure following its recent decision to increase the size of its planned non-amortizing debt issuance to €400 million from €300 million, Fitch said.

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