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Rpt fitch affirms wso finance pty limited at bbb+; outlook stable


(Repeat for additional subscribers)Sept 19 (The following statement was released by the rating agency)Fitch Ratings has affirmed the ratings of WSO Finance Pty Limited's (WSO Finance) senior secured bank debt facilities, comprised of the this site tranche A loan due September 2014: affirmed at 'BBB+'; Outlook Stable;AUD250m tranche C loan due December 2015: affirmed at 'BBB+'; Outlook Stable;AUD250m tranche B1 loan due December 2015: affirmed at 'BBB+'; Outlook Stable; andAUD255m tranche B2 loan due September 2017: affirmed at 'BBB+'; Outlook Stable.

The affirmation of WSO Finance's senior bank loan ratings is supported by the importance of the M7 as an integral link in Sydney's orbital road network, both for local and regional traffic, and by the expected ability of project cashflows to service debt comfortably even in conservative downside scenarios. KEY RATING DRIVERS The Westlink M7 acts as an important road link for Sydney and for interstate traffic. The road serves the expanding suburbs and business areas of western Sydney, and links the M5, M2 and M4 motorways. In addition, the Westlink M7 is a major freight corridor that links the major southern and northern national highways in Sydney's west.

Traffic growth on Westlink M7 slowed to 1.3% in FY12 (year ending 30 June), well below the historical average due to a combination of construction works on the adjoining Hills M2 motorway, and slower economic growth. Traffic growth rebounded somewhat to 3.6% in FY13 as the Hills M2 achieved staged reopening (with final completion on 1 August 2013) but new widening works on the M5 (which links to the southern end of the Westlink M7) commenced. Growth should improve over the next 12 to 18 months as all construction work is completed. Volume risk is assessed as "Midrange". Toll rates on the Westlink M7 change in line with consumer price inflation, as per the concession agreement, and would therefore be constrained if Australia entered a period of low inflation. Price risk is assessed as "Midrange". While typical of the Australian market, the bullet debt structure is a weaker attribute compared to other global Fitch-rated toll roads. However, WSO has a proven track record of refinancing debt well in advance of maturity, and is assisted in that regard by its shareholders Transurban (50%, A-/Stable), QIC (25%), and CPPIB (25%). WSO benefits from its shareholders' global banking relationships and capital markets experience. Structural features include reserve accounts for both debt service and major maintenance. Interest hedging is in place, although this does not extend past the current debt maturity dates.

The Debt Structure risk attribute is assessed as "Midrange". Financial metrics are good for a 'BBB' category rating. Given the lack of scheduled amortisation and the existence of a finite end date on the concession, Fitch has evaluated WSO on a synthetic annuity 20 year debt service capital ratio (DSCR), and concession life cover ratio (CLCR), as well as gearing. The minimum CLCR in Fitch's base case is 2.87x which, along with average annuity DSCR of 2.84x, indicates a strong ability to retire debt. Net debt/EBITDA is at 7.1 in FY13 in Fitch's base case (based on actual results through March 2013), and is expected to drop to 5.4 by FY16. Finally, the transaction is resilient to interest rate stress scenarios. The Debt Service risk attribute is assessed as Midrange. Westlink's major maintenance program is reviewed on a periodic basis by Evans and Peck, a global infrastructure advisory firm, and approved by Westlink's board. Asset class reviews are performed regularly with the participation of 50%-owner Transurban. While the Lend Lease and Leighton Contractors joint venture is contracted for everyday operations and management, major expenditures such as re-sheeting are put out for tender. Westlink benefits from Transurban's scale in negotiating with Australian contractors. A maintenance reserve is required by current debt documents. Infrastructure renewal is assessed as "Stronger". RATING SENSITIVITIES The rating is constrained by its higher leverage compared to other Fitch-rated Sydney roads, including Interlink Roads Pty Limited (A-/Stable) and AMT Management Limited (A-/Stable). While its location in a high growth area of Sydney can provide upside in a positive economic environment, this may also create greater volatility in the event of an economic downturn. WSO Finance's ratings could come under downward pressure in the near term in the event that the refinancing of Tranche A (due September 2014) was not completed by June 2014. A rating upgrade would be considered if operations improved such that net debt/EBITDA fell below 6.0 for a sustained period.

Rpt fitch revises stresses to structured finance gbp libor and euribor


Jan 23 (The following statement was released by the rating agency)Fitch Ratings has reviewed its criteria for stressing interest rate risk in covered bonds and structured finance transactions and amended the stresses applicable to Euribor, UK pound Libor and New Zealand interbank rates. The changes concern the parameters applicable to the three rates, but core principles of the criteria remain unchanged. In particular, the equilibrium rate assumptions for the three rates have been lowered to reflect Fitcha€™s view on long-term growth potential and target inflation in the respective countries. In addition, the agencya€™s mildest long-term stress of a€˜Bsfa€™ for Euribor and UK pound Libor has been lowered, in line with the equilibrium rate decrease, while the a€˜AAAsfa€™ long-term stress is unchanged. This is because while the updated long-term expectations supporting the equilibrium rate assumptions result in a revision of the agencya€™s mildest stress (Bsf), they do not represent a fundamental macroeconomic shift that renders the a€˜AAAsfa€™ stresses inadequate. Similarly, the short-term stresses have been kept constant at high rating levels, while the a€˜Bsfa€™ short-term stress has been reduced in line with a lower equilibrium rate. The change reflects the agencya€™s view that its mildest interest rate stresses (Bsf) should account for reduced volatility risk.

Fitch does not expect any rating changes to result from the implementation of the update.a€œAlthough the current low and stable interest rate environment represents a significant deviation from historical trends, we believe that in the long run rates will normalise in line with our equilibrium rate assumptions as the global economy returns to growth,a€' says Michele Cuneo, Senior Director at Fitcha€™s Structured Finance team. a€œThe decision to keep the stresses applicable to high rating levels substantially unaltered reflects also the uncertain outcome and timing of a turn in current monetary policiesa€'.

The criteria update also includes stress parameters for Polish Zloty Wibor, which are published together with the parameters applicable to other interest rates in the spreadsheet "Fitch's Interest Rate Stress Assumptions for Structured Finance" dated 22 January 2014, available at this site The criteria outline Fitcha€™s methodology for analysing the vulnerability of structured finance transactions and covered bonds to interest rate changes. The framework combines both short-term and long-term considerations and provides for upwards and downwards stressed interest rate movements for different rating stresses. Fitch has also completed an updated review of the interest rate stresses and calibration parameters applicable to each short-term market interest rate (i.e. Libor or currency-specific equivalents). The process included an analysis of historical rate movements, a review of the economic outlook and monetary policy regimes of each country, and an evaluation of the resultant levels of stress produced by applying the interest rate criteria.

The updated criteria report "Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds" and accompanying spreadsheet are available at this site. Link to Fitch Ratings' Report: Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds var $relatedItems = $('lia "/article/norway-housing-idUSL5N1EU1V8"UPDATE 1-Norway\'s housing inflation at nine-year high in December/a/lilia "/article/idUSFWN1EU0JJ"BRIEF-Sesac says it will be acquired by Blackstone/a/li'), $relatedItems = $relatedItems.slice(0,10), relatedBlockLimit = Number('6'), relatedItemsTotal = $relatedItems.length, $paragraphTags = $('#article-text p'), contentParagraphs = 0, minParagraphs = Number("8"); for (i=0; i $paragraphTags.length; i++) { if ($paragraphTags[i].innerText.trim().length 0) { contentParagraphs = contentParagraphs + 1; } } if (contentParagraphs minParagraphs) { setTimeout(function(){ if (relatedItemsTotal relatedBlockLimit) { $('.first-article-divide').append('div class="related-content group-one"h3 class="related-content-title"Also In Financials/h3ul/ul/div'); $('.second-article-divide').append($('.slider.slider-module')); $('.third-article-divide').append('div class="related-content group-two"h3 class="related-content-title"Also In Financials/h3ul/ul/div'); var median = (relatedItemsTotal / 2); var $relatedContentGroupOne = $('.related-content.group-one ul'); var $relatedContentGroupTwo = $('.related-content.group-two ul'); $.each($relatedItems, function(k,v) { if (k + 1 = median) { $relatedContentGroupOne.append($relatedItems[k]); } else { $relatedContentGroupTwo.append($relatedItems[k]); } }); } else { $('.third-article-divide').append($('div class="related-content group-one"h3 class="related-content-title"Also In Financials/h3ul/ul/div')); $('.related-content ul').append($relatedItems); } },500); } Next In Financials Saudi's Riyad Bank recommends lower cash dividend for H2 2016 DUBAI, Jan 4 The board of Riyad Bank has proposed paying a cash dividend of 0.30 riyals ($0.08) per share for the second half of 2016, Saudi Arabia's fourth-largest lender by assets said on Wednesday. BRIEF-CME Group reached record average daily volume of 15.6 mln contracts in 2016 * Cme group reached record average daily volume of 15.6 million contracts in 2016, up 12 percent from 2015 Dubai Islamic Bank requests proposals for dollar sukuk - sources DUBAI, Jan 4 Dubai Islamic Bank (DIB) has asked banks to submit proposals to arrange a potential U.S. dollar-denominated sukuk issue, sources familiar with the situation said on Wednesday. MORE FROM REUTERS window._taboola = window._taboola || []; _taboola.push({ mode: 'organic-thumbnails-a', container: 'taboola-recirc', placement: 'Below Article Thumbnails - Organic', target_type: 'mix' }); Sponsored Content @media(max-this site) { #mod-bizdev-dianomi{ height: 320px; } } From Around the Web Promoted by Taboola window._taboola = window._taboola || []; _taboola.push( { mode: 'thumbnails-3X2', container: 'taboola-below-article-thumbnails', placement: 'Below Article Thumbnails', target_type: 'mix' } ); window._taboola = window._taboola || []; _taboola.push