Moody's cuts Transurban outlook to negative

Moody's Investors Service said it affirmed Transurban Finance Co. Pty. Ltd.'s A3 senior secured debt rating and changed the outlook to negative from stable following the announcement by the Transurban Group that it has reached an in-principle agreement with the Virginia Department of Transportation to acquire the Pocahontas Parkway.

The change in outlook reflects the agency's concern regarding the ongoing diversification of the Transurban Group into higher risk assets, the pattern of heavily debt funding such diversification, the leverage of the Transurban Group after this acquisition and the ongoing uncertainty surrounding the group's credit profile given its intention to grow in the U.S. toll road market.

Moody's estimated that the group's debt to EBITDA ratio will fall to between 7.5x and 8x following the acquisition.

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