Fitch Ratings has affirmed
The Outlook is Stable.
The affirmation follows the recently announced acquisitions and shareholder capital injection of
RATING RATIONALE
The rating affirmation reflects the improved quality and extended duration of the Abertis portfolio of assets, in a context of a leverage profile that is still commensurate with its current rating. The group's M&A strategy limits the visibility of future capital structure, although, in our view, the potential downsizing of distributions provides financial flexibility.
KEY RATING DRIVERS
On
The four assets are 192km long; they are operating and are strategic to
In addition, Abertis announced the signing of the acquisition of a 56.78% stake in SH288 ('BBB'/Stable), a 17km-long managed lane in
The new assets will increase the group's portfolio quality and weighted average duration by about two years, enhancing Abertis's debt capacity, in addition to shareholder support. In this context, we view Abertis's average leverage of 6.0x under the Fitch rating case (FRC) as still commensurate with the 'BBB' rating.
Both transactions are consistent with Abertis's strategy aiming at extending its portfolio concession maturity, increasing its presence in mature countries and replacing the EBITDA of the expiring assets. The equity contribution is also consistent with the new corporate governance, which aims to support the company with the necessary resources to expand its portfolio perimeter, while maintaining an investment-grade rating.
For an overview of Abertis's credit profile, including key rating drivers, see 'Fitch Revises Outlook on Abertis to Stable; Affirms Ratings' published
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
Failure to reduce Fitch-adjusted Leverage below 6.2x by 2024 under the FRC.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
A positive rating action is currently unlikely given the projected leverage, level and group acquisitive stance.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.
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