RPT-Fitch Affirms Caisse Nationale des Autoroutes at 'AA+'; Outlook Stable

Fri Jan 10, 2014 8:15am EST

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Jan 10 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings has affirmed Caisse Nationale des Autoroutes' (CNA) Long-term foreign and local currency Issuer Default Ratings (IDRs) at 'AA+' with a Stable Outlook, and its Short-term foreign currency IDR at 'F1+'.

Under its rating of public-sector entities criteria, Fitch classifies CNA as a dependent public-sector entity of the state of France (AA+/Stable/F1+). The ratings of CNA are aligned with those of the State since CNA, as a state administrative public agency (EPA), benefits from a statutory solvency guarantee from the State. As an EPA, CNA cannot be liquidated or go bankrupt, and is allowed to receive State emergency funding. Also, the control of the State over CNA is strong.

KEY RATING DRIVERS

CNA benefits from an implicit state guarantee since the law of 16 July 1980 renders the State ultimately liable for its EPAs' debts. CNA can access state emergency financial support mechanisms such as emergency loans or the purchase of CNA bonds by the Ministry of Finance. There are no caps on the latter, which only requires agreement from the Minister of Finance. CNA has no equity and its liabilities are modest compared with the state's funding capacity.

The State exercises direct control over CNA as most board members are civil servants. As an EPA, CNA follows public accounting rules and is audited by sponsor ministries or the National Court of Accounts.

CNA mainly acts as a debt-amortising structure for debt previously incurred on behalf of motorway concessions companies (MCCs) until 2006. The privatisation of the main MCCs from 2001 to 2006 has made them ineligible for public funding. CNA still provides funding to small state-owned MCCs, such as tunnel operators ATMB and SFTRF. In 2013, CNA issued a EUR147m bond and signed a EUR120m multi-year funding agreement with the European Investment Bank. Financial covenants between CNA and MCCs are in place to ensure MCCs' loan repayment capabilities. MCCs' net debt should not exceed 7x their EBITDA and their EBITDA should cover at least 2.2x financial charges.

Debt decreased to EUR9.1bn at end-2013 from EUR10.3bn in 2012. The amortisation schedule is smooth, with debt stock falling under EUR0.7bn in 2018 and to zero in 2027. Debt taken on behalf of private MCCs accounted for 85% of CNA's total debt at mid-2013.

MCCs benefit from a rather diversified user base and a predictable regulatory framework. Despite low economic growth, high fuel prices and a slight decrease in traffic (-0.7% in 2012), total revenue grew by 4.3% in 2012, above the 2008-2012 average annual growth of 3.8%. Total MCCs debt stabilised in 2012 at EUR31bn. Capital expenditure (EUR1.77bn in 2012) is mainly focused on maintenance, as the French motorway network is almost complete.

CNA's day-to-day administration and financial management, which are under the control of CNA's Board of Directors, have been subcontracted to Caisse des Depots et Consignations (CDC, AA+/Stable/F1+). CNA operating costs mainly consist of CDC management fees and interest charges, and are fully matched by mandatory contributions from all MCCs.

RATING SENSITIVITIES

A downgrade of France would be mirrored in CNA's ratings. An adverse change in CNA's legal framework could also lead to a negative rating action.

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