-- On Oct. 18, 2012, we affirmed our 'BBB' long-term corporate credit
rating on Spain-based infrastructure operator Abertis Infraestructuras S.A.
(Abertis), following our downgrade of Spain to 'BBB-/A-3'.
-- We equalize our long-term corporate credit rating on France-based toll
road operator Sanef with that on Abertis to reflect the strategic importance
of Sanef for Abertis.
-- We are therefore affirming our 'BBB/A-2' long- and short-term
corporate credit ratings on Sanef.
-- The negative outlook on Sanef reflects that on Abertis. We could lower
our ratings on Sanef if we downgrade Abertis.
On Oct. 18, 2012, Standard & Poor's Ratings Services affirmed its 'BBB/A-2'
long- and short-term corporate credit ratings on French toll road network
operator Sanef. The outlook is negative.
At the same time, we affirmed our 'BBB' issue rating on Sanef's senior
The affirmation follows a similar action on Sanef's controlling shareholder,
Spain-based infrastructure operator Abertis Infraestructuras S.A. (Abertis;
see "Spain-Based Abertis Infraestructuras 'BBB' Rating Affirmed Following
Sovereign Downgrade; Outlook Negative", published on Oct. 18, 2012, on
RatingsDirect on the Global Credit Portal).
We equalize our long-term corporate credit rating on Sanef with that on
Abertis to reflect our view that Abertis would provide timely and sufficient
extraordinary support to Sanef in the event of financial distress. This
support stems from Sanef's strategic importance for Abertis, and Sanef's large
contribution, through intermediate holding company Holding d'Infrastructures
de Transport S.A.S. (HIT; not rated), to Abertis' consolidated revenues and
In 2011, Sanef's EBITDA represented about 40% of Abertis' EBITDA on a fully
consolidated basis, and about 25% on a proportionate basis. We anticipate
that, in 2013, Sanef's contribution to Abertis will decline, but that it will
still represent about 35% of Abertis' EBITDA on a fully consolidated basis,
and about 25% on a proportionate basis. The proportionate figures adjust for
minority shareholdings in HIT and in Brazilian toll-road operator OHL Brasil
Disregarding our expectation of support from Abertis, we assess Sanef's
stand-alone credit profile (SACP) at 'bbb-'. The SACP reflects our view of
Sanef's "excellent" business risk profile, tempered by its "aggressive"
financial risk profile. Our assessment of Sanef's financial risk profile
incorporates the leverage of its parent company, HIT. This is because HIT
relies on Sanef, as its sole asset, to service its debt.
Sanef operates the third-largest interconnected toll-road network in France.
Although the company is exposed to variations in traffic volumes, it benefits
from a strong competitive position; favorable concession agreements, including
yearly inflation-linked tariff increases; high profitability; and positive
free cash flows. We consider the risk of acquisitions and diversification to
be low. These strengths are partly offset by Sanef's high indebtedness, and
its relatively rigid dividend policy.
We assess the liquidity position of Sanef and its parent company HIT as
"adequate" under our criteria. We estimate that sources of liquidity for the
12 months to June 30, 2013, will cover uses of liquidity by about 1.3x.
We estimate liquidity sources in the 12 months to June 30, 2013, to be about
EUR1 billion. These include:
-- Funds from operations of about EUR575 million; and
-- About EUR460 million available under bank lines that expire after June
30, 2013. In addition, we understand that commitments have been received for
the renewal of a EUR50 million facility that expired in July, of which EUR10
million was available on June 30, 2012.
On June 30, 2012, HIT on-lent about EUR225 million of its cash to Abertis, which
we do not include in our liquidity calculations.
We anticipate that liquidity needs will be about EUR770 million over the same
-- Debt repayments of about EUR330 million; and
-- Capital spending and dividend payments of about EUR450 million.
Sanef expects to maintain adequate headroom under its financial covenants.
Following repayment of loans maturing in 2013, HIT's financing arrangements no
longer include any financial covenants.
The negative outlook on Sanef reflects that on Abertis. We could lower our
rating on Sanef if we take a similar rating action on Abertis.
In our view, the weak economic environment in Europe could undermine an
improvement in Abertis' credit metrics and a repayment of its recourse debt,
both of which support our 'BBB' rating on Abertis and, therefore, our ratings
In addition, under our criteria for rating an entity in the eurozone (European
Economic and Monetary Union) above the sovereign, we could lower our rating on
Abertis if we downgrade Spain.
We anticipate that our ratings on Sanef will evolve in line with the long-term
rating on Abertis.
Related Criteria And Research
All articles listed below are available on RatingsDirect on the Global Credit
Portal, unless otherwise stated.
-- Methodology: Short-Term/Long-Term Ratings Linkage Criteria For
Corporate And Sovereign Issuers, May 15, 2012
-- Methodology And Assumptions: Liquidity Descriptors For Global
Corporate Issuers, Sept. 28, 2011
-- Nonsovereign Ratings That Exceed EMU Sovereign Ratings: Methodology
And Assumptions, June 14, 2011
-- Principles Of Credit Ratings, Feb. 16, 2011
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
-- 2008 Corporate Criteria: Ratios And Adjustments, April 15, 2008
-- 2008 Corporate Criteria: Rating Each Issue, April 15, 2008
-- Parent/Subsidiary Links; General Principles; Subsidiaries/Joint
Ventures/Nonrecourse Projects; Finance Subsidiaries; Rating Link to Parent,
Oct. 28, 2004
-- Spain Ratings Lowered To 'BBB-/A-3' On Mounting Economic And Political
Risks; Outlook Negative, Oct. 10, 2012
-- Toll Facilities' Credit Quality Is Holding Steady Globally Despite
Bumps In The Road, Oct. 4, 2012
-- Country Risks, A Weak Economic Climate, And M&A Activity Test
Resilience Of European Toll Road Network Operators, July 12, 2012
Corporate Credit Rating BBB/Negative/A-2
Senior Unsecured BBB