Research Update: 407 International Inc. Ratings Removed From CreditWatch Following Resolution Of Congestion Payment Claim

We affirmed our 'A' rating on 407 International Inc.'s senior debt, 'A-' rating on the company's junior debt, and 'BBB' rating on its subordinated debt and removed them from CreditWatch, where we placed them with negative implications on Nov. 11, 2020, following the successful resolution of the congestion payment force majeure claim. The outlook is stable. The Ministry of Transportation of Ontario (MTO) has confirmed that the pandemic is a force majeure event and the project is not subject to congestion payment provisions under its concession agreement until the traffic recovers to pre-pandemic levels (measured as an average of 2017-2019) unless the project raises its toll rate. Either of these events will terminate the force majeure determination and the project

...- We affirmed our 'A' rating on 407 International Inc.'s senior debt, 'A-' rating on the company's junior debt, and '###' rating on its subordinated debt and removed them from CreditWatch, where we placed them with negative implications on Nov. 11, 2020, following the successful resolution of the congestion payment force majeure claim. The outlook is stable. - The Ministry of Transportation of Ontario (MTO) has confirmed that the pandemic is a force majeure event and the project is not subject to congestion payment provisions under its concession agreement until the traffic recovers to pre-pandemic levels (measured as an average of 2017-2019) unless the project raises its toll rate. Either of these events will terminate the force majeure determination and the project will be subject to congestion payments commencing from the subsequent year. - While prolonged locked-down-like conditions in Ontario have caused a slow recovery in traffic and likely keep the credit metrics for the remainder...

Research Update