NSW Ports Finance Co. Pty. Ltd

The stable outlook reflects our view that economic growth in New South Wales and the port's index-linked tariffs will support the port's earnings growth. We expect the port to continue maintaining a capital structure that is consistent with a 'BBB' rating. We also expect the port to maintain its FFO-to-debt ratio at 8%-8.5% over the next two to three years. Although a low probability scenario, a downgrade could occur if the port's shareholder distributions were substantially higher than our expectations and poor economic conditions in the state significantly reduced container volume growth. This scenario could weaken the port's financial metrics such that its FFO to debt approaches 7%. Such a weakening would also indicate that the port lacked commitment to

...We believe that the port will continue to benefit from its strong market position and landlord business model. NSW Ports (rated finance entity NSW Ports Finance Pty Ltd.) is the second-largest container port in Australia and the sole car terminal and common-user bulk liquid port in the State of New South Wales. Its landlord business model and diversity of revenue from a relatively stable property segment will continue to support the port's business risk profile. This would allow the port to manage some of the likely slowdown in the trade segment....

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