Bulletin: 407 International Inc.'s Summer Traffic Outperforms Forecast

TORONTO (S&P Global Ratings) Oct. 27, 2021--S&P Global Ratings today said it doesn't expect 407 International Inc.'s recently announced $300 million dividend payment to shareholders to affect the project's credit quality. The announcement follows strong recovery in traffic this summer, which we expect to continue. Both traffic (measured by vehicle kilometers travelled) and revenues improved to nearly 75%-80% of 2019 figures compared with our expectation of 60% in the third quarter of 2021 and 50%-55% in the second quarter of 2021. Our rating is unchanged. This will be the first dividend by 407 since September 2020. We previously assumed the slower traffic recovery would result in a distribution lockup as specified in its bond indenture through year-end. However, better than

...October 27, 2021 TORONTO (S&P Global Ratings) Oct. 27, 2021--S&P Global Ratings today said it doesn't expect 407 International Inc.'s recently announced $300 million dividend payment to shareholders to affect the project's credit quality. The announcement follows strong recovery in traffic this summer, which we expect to continue. Both traffic (measured by vehicle kilometers travelled) and revenues improved to nearly 75%-80% of 2019 figures compared with our expectation of 60% in the third quarter of 2021 and 50%-55% in the second quarter of 2021. Our rating is unchanged. This will be the first dividend by 407 since September 2020. We previously assumed the slower traffic recovery would result in a distribution lockup as specified in its bond indenture through year-end. However, better than expected traffic and revenue improved the project's indenture-based debt service coverage ratio (DSCR) to 1.44x, above the distribution threshold of 1.35x. Given that the project favorably resolved its...

Bulletin