June 24 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings says that Transurban Finance Company’s (TFC, ‘A-‘/Stable) rating will not be affected by the impending transfer of the Pocahontas 895 toll road, in Virginia, USA, to the lenders to the toll road.
On 14 June 2013 Transurban Group (Transurban) announced the board’s approval of the transfer, which is expected to be finalised by October 2013. Transurban holds a 75% stake in Pocahontas 895 through Transurban DRIVe Holdings LLC.
In June 2012, Transurban announced that it was writing down the value of its investment in Pocahontas 895 to zero, incurring an equity accounting charge of AUD138.1m in its accounts as a result of expected cash flows falling significantly below original forecasts. At that time, Fitch highlighted that the lower cash flows were likely to impair the ability of Pocahontas 895 to service the bank and TIFIA loans used to fund the road’s development.
The equity write-down and the impending transfer do not have any impact on the cash position of Transurban or TFC. Fitch’s current analysis does not incorporate any dividend cash flow to Transurban from Pocahontas 895. Instead, Transurban’s credit quality is underpinned by the solid operating and financial performance of its Australian toll road portfolio. The agency expects that Transurban’s cashflow will continue to be dominated by its Australian portfolio, at least in the medium term.