June 24 (The following statement was released by the rating agency)
Fitch Ratings says that Transurban Finance Company's (TFC, 'A-'/Stable) rating
will not be affected by the impending transfer of the Pocahontas 895 toll road, in Virginia,
USA, to the lenders to the toll road.
On 14 June 2013 Transurban Group (Transurban) announced the board's approval of
the transfer, which is expected to be finalised by October 2013. Transurban
holds a 75% stake in Pocahontas 895 through Transurban DRIVe Holdings LLC.
In June 2012, Transurban announced that it was writing down the value of its
investment in Pocahontas 895 to zero, incurring an equity accounting charge of
AUD138.1m in its accounts as a result of expected cash flows falling
significantly below original forecasts. At that time, Fitch highlighted that the
lower cash flows were likely to impair the ability of Pocahontas 895 to service
the bank and TIFIA loans used to fund the road's development.
The equity write-down and the impending transfer do not have any impact on the
cash position of Transurban or TFC. Fitch's current analysis does not
incorporate any dividend cash flow to Transurban from Pocahontas 895. Instead,
Transurban's credit quality is underpinned by the solid operating and financial
performance of its Australian toll road portfolio. The agency expects that
Transurban's cashflow will continue to be dominated by its Australian portfolio,
at least in the medium term.