TEXT-S&P cuts Autolink M6 SPUR to 'BBB-'; outlook stable

Dec 20 -

Overview

-- Based on the recently signed contract for pavement remedial works and planned resurfacing, we believe that Autolink may not maintain a contractual debt service coverage ratio (DSCR) at a minimum of 1.25x. This, together with its reliance on interest income and discretionary cash releases from reserves to meet debt service during the works period is, in our view, not commensurate with a rating in the mid 'BBB' category.

-- We are lowering our SPUR on Autolink's senior secured Class A bonds to 'BBB-' from 'BBB', and revising the outlook to stable from negative.

-- The stable outlook on the SPUR reflects our view that the project will complete the pending remedial works by the end of 2014 and within a budget that results in a minimum contractual DSCR of 1.20x.

Rating Action

On Dec. 20, 2012, Standard & Poor's Ratings Services lowered its Underlying Rating (SPUR) to 'BBB-' from 'BBB' on the GBP124.8 million senior secured bonds, due 2022, issued by U.K.-based road operator Autolink Concessionaires (M6) PLC (Autolink), and revised the outlook to stable from negative on the SPUR.

The senior secured Class A bonds benefit from an unconditional and irrevocable guarantee provided by Assured Guaranty (Europe) Ltd. (AGE; AA-/Stable/--) of payment of scheduled interest and principal. Under Standard & Poor's criteria, a rating on a monoline-insured debt reflects the higher of the rating of the monoline insurer or Standard & Poor's SPUR on the debt.

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