S&P puts Ostregion on watch

Standard & Poor's said it placed on CreditWatch with negative implications European Investment Bank's B+ long-term rating on its €425 million in floating-rate senior secured bonds due 2039 and €350 million floating-rate senior secured loan, both due 2038.

Both were borrowed by special-purpose vehicle Ostregion Investmentgesellschaft Nr. 1 SA (Ostregion).

The 2 recovery rating, which indicates an expectation of 70% to 90% expected recovery in default, is not affected.

The CreditWatch placement reflects an increasing chance that the agency could lower the ratings by one or more notches if the project parties do not reach an agreement that allows the project to receive sufficient and timely top-up payments, S&P said.

The proceeds will be used to finance the Ostregion Package 1, a 33-year public-private partnership concession to design, build, finance, operate and maintain a motorway to the north of the City of Vienna, the agency said.

The bonds and the loan benefit from an unconditional and irrevocable guarantee of payment of scheduled interest and principal from Ambac Assurance U.K. Ltd., S&P said.

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