S&P gives Atlantia notes BB-

S&P said it gave Atlantia SpA’s planned offering of €1 billion of 1 7/8% senior unsecured notes due 2028 to bolster its liquidity buffer and partially refinance the €1.2 billion term loan due 2022 a BB- rating with a 3 (90%) recovery rating.

The notes’ terms reflect Atlantia’s plan to sell ASPI and align the financing documentation to the group’s future structure. Under the notes’ financing documentation, Atlantia simplified the subsidiaries’ definition that can trigger an event of default or a put event at the bondholders’ option in the future. Both clauses are now linked to principal subsidiaries that generate more than 25% of group EBITDA on a stand-alone basis and exclude the Italian toll road operator ASPI (88% owned), S&P said.

“In the worst-case scenario in which the grantor revokes the ASPI concession without timely compensation, there is a risk that Atlantia’s debt is accelerated by existing bondholders, following the exercise of a put option by ASPI bondholders. The liquidity risk extends to the proposed €1 billion notes as they contain a cross-default clause with Atlantia’s existing indebtedness. This liquidity risk continues to underpin our BB- rating on the toll road operator and its holding company, which guarantees about €4.7 billion of ASPI’s debt at present,” the agency said in a press release.

The outlook is developing.

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