CIMIC Group Ltd.

The stable outlook on CIMIC reflects the outlook on the ultimate parent, ACS, given our view that CIMIC and its immediate parent, Hochtief, are core subsidiaries of the ACS group. We therefore equalize the ratings and outlook on CIMIC with those on the ultimate parent. The stable outlook on ACS and its core subsidiaries reflects our expectation that the ACS group's adjusted FFO to debt will stand above 25% in 2021-2022. The group's solid order backlog and still-positive prospects for civil infrastructure construction should support operating performances. We forecast the ACS group's adjusted EBITDA margin at 7.5%-8.0% for 2021-2022. This would be underpinned by a secured order backlog, new projects, and dividends from Abertis Infraestructuras, S.A. ACS is negotiating the

... exposure, and solid order backlog should allow the group to navigate COVID-19 delays and social-distancing measures. We expect CIMIC to manage through this period by maintaining a strong liquidity position, and reducing costs and discretionary expenditure. In our view, the company will effectively manage cash flow and working capital and cut nonessential capital expenditure. We expect CIMIC's prudent approach to financial risk management to support the current rating. CIMIC is committed to maintaining a strong balance sheet that supports an investment-grade rating. We anticipate the company will manage debt-to-EBITDA below 2.5x and maintain strong liquidity. It aims to diversify its funding sources, term out its long-term debt and utilize revolving credit facilities for working capital and standby liquidity. Its 625 million euro eight-year fixed-rate 1.593% corporate bond issued in 2Q21 is evidence of the company's good access to capital...

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