S&P lowers Arc Infrastructure to negative

S&P said it revised the outlook to negative from stable on Arc Infrastructure Pty Ltd.

The agency also said it affirmed the company's BBB long-term issuer credit rating and issue ratings on its related debt.

The outlook revision reflects Arc's weakening business profile and likely lower financial metrics following the loss of two major customers that represent 20% to 25% of Arc's revenue, S&P said.

As a result, the agency also said it revised downward the assessment of Arc's stand-alone credit profile to BBB- from BBB.

S&P also said it affirmed the issuer credit rating because it considers that Arc remains a moderately strategic subsidiary of its ultimate parent, Brookfield Infrastructure Partners LP.

This reflects an opinion that Brookfield is unlikely to sell Arc in the near term, Arc's reasonable success in its operations and a view that Arc is likely to receive support from Brookfield should it fall into financial difficulty, the agency said.

Arc's business strength primarily reflects its monopoly position as the sole rail network operator in the southwest of Western Australia, supporting the Perth region and all five of the state-owned ports in the area, S&P said.

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