Moody’s: Asciano view to negative

Moody’s Investors Service said it changed the outlook of Asciano Ltd. and Asciano Finance Ltd. to negative following news that Brookfield Infrastructure will acquire the entire issued capital of Asciano for a value of about A$412 billion.

Moody’s also said it affirmed the existing Baa2 issuer rating of Asciano and senior unsecured ratings of Asciano Finance.

The outlook change reflects the uncertainty around the ultimate financial policies to be applied by the new owners and the potential for increased debt at Asciano, assuming completion of the transaction, the agency said.

The rating could face further pressure if, following a successful transaction, the consortium looks to refinance a material amount of deal by raising debt at Asciano, Moody’s said, or there is a permanent and material increase in debt at Asciano to fund the proposed special dividend.

The rating could be downgraded to Baa3 if the company’s debt-to-EBITDA ratio is maintained at more than 4x on an ongoing basis, the agency said.

The ratings also reflect a current expectation that there will be no material changes to Asciano’s business profile should the transaction be completed, Moody’ said.

But the ratings ultimately reflect any changes to the company’s ongoing financial profile under the Brookfield Consortium’s potential ownership, the agency added.

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