S&P trims One Rail Australia

S&P said it lowered its ratings for One Rail Australia Holdings Ltd. to BB- from BB and its senior secured loan and notes to BB+ from BBB-. The recovery rating on the debt is unchanged at 1 (95%), indicating a very high level of recovery.

One Rail’s ultimate parent company, Magnetic Infrastructure Group Pty Ltd, borrowed additional mezzanine debt of A$125 million to meet the balance consideration for its purchase of One Rail.

“We previously expected the MIG group to meet this payment with proceeds from the issue of additional equity by MIG. With the upsizing of the existing mezzanine debt, a recovery of the consolidated FFO-to-debt ratio to above 13% (a level commensurate with the previous BB rating) will be delayed by another two years or so, thereby leading to the downgrade,” S&P said in a statement.

The outlook is stable.

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