Atlantia And Subsidiaries Downgraded On Increased Concession Termination Risk For ASPI; Ratings On Watch Negative

The Italian government recently introduced unilateral changes by Law Decree n.162/2019 ("Milleproroghe") to toll road operators' regulatory framework. Under the Milleproroghe, the process for terminating or revoking concession contracts is less costly to the Grantor and not subject to the Grantor making a timely termination payment (which underpinned our analysis). In our view, the Milleproroghe negatively affects ASPI (and thus indirectly Atlantia) by increasing the risk of a concession termination by either ASPI or the Grantor, with difficult-to-predict liquidity and legal consequences for ASPI and Atlantia. If the concession were terminated or revoked, we would expect protracted legal proceedings bearing in mind that the concession initially provided strong protections to ASPI including in case of changes in the regulatory or

...January 13, 2020 - The Italian government recently introduced unilateral changes by Law Decree n.162/2019 ("Milleproroghe") to toll road operators' regulatory framework. Under the Milleproroghe, the process for terminating or revoking concession contracts is less costly to the Grantor and not subject to the Grantor making a timely termination payment (which underpinned our analysis). - In our view, the Milleproroghe negatively affects ASPI (and thus indirectly Atlantia) by increasing the risk of a concession termination by either ASPI or the Grantor, with difficult-to-predict liquidity and legal consequences for ASPI and Atlantia. - If the concession were terminated or revoked, we would expect protracted legal proceedings bearing in mind that the concession initially provided strong protections to ASPI including in case of changes in the regulatory or legal framework. - We are therefore lowering our long- and short-term ratings on Atlantia and ASPI to '##-/B', with a recovery rating of...

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