S&P gives Abertis notes BB

S&P said it assigned its BB rating to the proposed perpetual, optionally deferrable, and subordinated hybrid capital instrument to be issued by Abertis Infraestructuras Finance BV and guaranteed by Abertis Infraestructuras SA. The hybrid is expected to be benchmark sized, and the amount remains subject to market conditions.

In explaining the rating, S&P said it dropped two notches from Abertis’ issuer rating, reflecting a notch for subordination and another for payment flexibility since it can defer interest payments.

“The notching reflects our view that there is a relatively low likelihood that Abertis will defer interest. Should our view change, we may significantly increase the number of notches we deduct to derive the issue rating, and more quickly than we might take action on the ICR,” S&P said in a press release.

The agency said it sees the company’s new financial policy, which also includes annual dividend distributions reduced to €600 million in 2021-2022 from €875 million in 2018-2020, as supportive of Abertis’ credit metrics. “We believe a more diversified capital structure is in line with Abertis’ acquisitive strategy to replace some expiring concessions in Spain,” S&P said.

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