S&P ends 407 observation

S&P said it affirmed the BBB rating on 407 International Inc.’s subordinated debt and removed it from under criteria observation.

On Dec. 14, the agency published its revised criteria for project finance.

“We completed our review of our rating on 407 International Inc.'s (407) subordinated debt, which we had placed on UCO. In accordance with the new methodology, we now assess the liquidity position of the project's subordinated debt as less than adequate due to the absence of a dedicated debt service reserve.

“However, the project has access to a C$800 million revolver facility, and given management's record of not using its capacity, coupled with its ability to generate cash flow from operations, we believe the risk of nonpayment of the subordinated debt service that lacks a reserve is mitigated by the facility,” S&P said in a press release.

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