S&P provides A to 407 debt

S&P said it assigned its A rating to 407 International Inc.'s C$500 million senior debt issue.

At the same time, the agency affirmed 407's senior debt at A, junior debt at A- and subordinated debt at BBB.

The outlook is stable.

407 has issued C$500 million in senior debt to refinance the senior bank credit facilities, fund debt service reserve, and other expenditures. This would essentially free up cash flows for higher equity distributions.

"The ratings reflect the expected debt service coverage levels under our base-case and downside-case scenarios for senior, junior and subordinated debt," S&P credit analyst Yousaf Siddique said in a news release.

Although the concession extends through 2098, the agency said its assessment assumes a financial structure in which debt is fully amortized within 40 years.

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