Moody's may cut Transurban Finance

Moody's Investors Service said it placed Transurban Finance Co.'s A3 senior secured rating - with a negative outlook - on review for possible downgrade following its proposed acquisition of Sydney Roads Group.

The acquisition is for a total consideration of A$1.26 billion, of which up to $500 million will be debt funded and the balance from issuance of Transurban shares to Sydney Road's existing shareholders.

The review for possible downgrade reflects the event risk associated with the bid and uncertainties surrounding the acquisition process, Moody's said. Upon successful completion of the acquisition the rating will be affirmed at A3, with the outlook likely to be negative or stable depending on the final funding structure, the agency added.

The acquisition will result in the addition of up to A$500 million of debt to Transurban's balance sheet, Moody's said.

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