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S&P lifts Healthcare Support debt to BB-
S&P said it raised its ratings on senior secured debt issued by Healthcare Support (Newcastle) Finance plc to BB- from B+.
The ratings remain on CreditWatch with positive implications, where they were placed on March 30.
The debt comprises a £115 million senior secured European Investment Bank loan due March 2038, and £197.82 million of senior secured bonds due September 2041. Both debt tranches benefit from an unconditional and irrevocable payment guarantee of scheduled interest and principal provided by Syncora Guarantee U.K. Ltd.
According to the agency’s criteria, the issue rating on debt guaranteed by a monoline insurer is the higher of the rating on the insurer and the S&P underlying rating (SPUR). Because S&P does not rate Syncora, the rating on the issues reflect the SPUR.
The recovery rating on the debt remains at 2, indicating an expectation of recovery of principal in the lower half of the 70%-90% range if there is a payment default that is not covered by the financial guarantee.
S&P said it raised the ratings because, in its view, the risk of a project default has diminished following the successful conclusion of the settlement agreement. The agreement concludes a long-running dispute between Healthcare Support (Newcastle) Ltd., the Newcastle-Upon-Tyne Hospitals NHS Foundation Trust and the project's construction contractor, Laing O'Rourke, and facilities management provider, Interserve (Facilities Management) Ltd., relating to the completion sign-off of the clinical office block (Phase 8 of construction) at the Royal Victoria Infirmary in Newcastle and to unavailability and performance deductions.
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