(The following statement was released by the rating agency)
NEW YORK, Aug 27 - Standard & Poor's Ratings Services said today it assigned its 'AAA/A-1+' issuer credit ratings to Austrian motorway operator Autobahnen- und Schnellstrassen-Finanzierungs-Aktiengesellschaft (ASFINAG). The outlook is stable. At the same time, ASFINAG's EUR10 billion Euro MTN program was assigned 'AAA/A-1+' senior unsecured and short-term debt ratings.
"The ratings on ASFINAG reflect strong explicit and implicit government support, ensured by its strategic importance to the Republic of Austria (AAA/Stable/A-1+), which is the company's sole shareholder, and a tight legal framework defining the government's role in ASFINAG's operations," said Standard & Poor's credit analyst Kai Stukenbrock. "Moreover, the company enjoys a monopoly position in its field that is not likely to be challenged."
ASFINAG is the government agency responsible for the financing, construction, maintenance, and operation of the entire Austrian network of motorways and high-speed roads. While the motorway network remains the property of the Republic, ASFINAG has been granted the usufruct. It generates revenues from tolls and utilization fees charged to motorist, fines issued, and the operation of service areas.
The government, as the owner, exercises operational, management, and financial control over ASFINAG. The Ministry of Transportation, Innovation, and Technology is legally responsible for ensuring that ASFINAG has sufficient funds at all times to protect its liquidity and equity, and to pursue its activities as agreed with the government in its annual plans. There are currently two main channels to ensure this: the level of tolls and utilization fees, which is set by the Ministry; and funding from the Federal Financing Agency (Osterreichische Bundesfinanzierungsagentur), which is authorized to extend unlimited short-term financing to ASFINAG.
ASFINAG's EUR10 billion Euro MTN program, which will become its main source of debt financing, enjoys a full, explicit, direct, unconditional, and irrevocable guarantee from the government, which will be extended annually for a predetermined amount of drawdowns (EUR1.7 billion in 2003).
ASFINAG, together with its two subsidiaries Osterreichische Autobahnen- und Schnellstrassen-Geselschaft mbH and Alpenstrassen AG, enjoys a monopoly over the construction and operation of the motorway and high-speed road network. This position is unlikely to be challenged, and the government considers ASFINAG to be its exclusive agent in this area. Moreover, privatization of the company, which would require a change of the ASFINAG Law, is not currently being considered and seems unlikely.
ASFINAG has recorded losses for five of the past six years, and reported results overstate the company's financial strength, as the costs of motorway and high-speed road construction are booked as revenues because they increase the value of the usufruct granted to it. From 2004, however, ASFINAG will receive additional revenues estimated at EUR600 million annually from a new toll on trucks. Together with revenue from existing tolls, which has been stable and predictable thanks to moderate but continuous traffic growth, this will enable the company to stabilize the level of its debt outstanding and to increase its equity.
"Standard & Poor's expects that, due to the company's strategic importance, there will be no changes in government support and the legal framework governing ASFINAG, and the latter will maintain its monopoly position," said Mr. Stukenbrock. "In addition, the new truck toll is expected to strengthen ASFINAG's financial profile substantially from 2004 onward." ANALYST E-MAIL ADDRESSES [email protected] [email protected] [email protected] Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Credit Ratings Actions. Alternatively, call one of Standard & Poor's Ratings Desks: London (44) 20-7847-7400; Paris (33) 1-4420-6705; Frankfurt (49) 69-33-999-223; or Stockholm (46) 8-440-5916.