S&P trims AusNet Services

S&P said it lowered AusNet Services Ltd.’s issuer and senior debt rating to BBB+ and its two hybrid securities to BBB-.

“The lowered ratings primarily reflect AusNet's higher debt under the new ownership. Brookfield infrastructure funds and five other pension funds will own 100% of AusNet group effective Feb. 16, 2022. Upon acquisition, AusNet's debt balance will increase by about A$2 billion, reaching an estimated A$9 billion (our adjusted debt basis) at March-end 2022. This will dilute the cash flow leverage (ratio of FFO to debt) to about 8.5% in fiscal 2023 (year ending March 31, 2023), the first full year under the new owners,” S&P said in a press release.

The agency said it sees cash flow leverage remaining in the 8% area subject to dividend reinvestments to support capital expenditure and the balance sheet.

The outlook is stable.

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