DBRS rates 407 bonds A (low)

DBRS said it assigned a provisional rating of A (low) with a stable trend to 407 East Development Group General Partnership's proposed $120 million long-term senior bonds and $455.7 million short-term senior bonds.

The issuer is a special-purpose entity created to design, build, finance and maintain the Highway 407 east extension under a 33.6-year project agreement with the Province of Ontario (AA (low)/stable).

The agency said the A (low) rating is based on the availability-based revenues from the province; the construction contract, which passes down all of the issuer's construction period risks under a date-certain, fixed-price contract to a strong construction contractor; and the pass-down of all service period obligations, including lifecycle risk, to an experienced service provider.

The rating is bounded by the typical uncertainties with respect to large construction projects and 407 East Development Group's relatively limited resilience to shocks in the lifecycle budget, DBRS said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.