Research Update: Atlantia Ratings Placed On CreditWatch Negative On Heightened Downside Risk From ASPI Concession

On July 2, 2019, an internal commission appointed by the Italian Ministry of Infrastructure and Transport (MIT; the grantor) published a legal report on last August's Genoa bridge collapse. The report concludes that the grantor may invoke a breach of custody and maintenance to pursue a unilateral revocation of the Italian toll road concession of Autostrade per l'Italia (ASPI; the concessionaire), although the renegotiation of the concession could be considered as an alternative to its unilateral revocation. Moreover, as a result of negative political sentiment towards Atlantia SpA--the toll road and airport operator that owns 88% of ASPI--we see a heightened risk that any renegotiated concession terms (including investment remuneration) will be less favorable to ASPI. We do not assume

...- On July 2, 2019, an internal commission appointed by the Italian Ministry of Infrastructure and Transport (MIT; the grantor) published a legal report on last August's Genoa bridge collapse. The report concludes that the grantor may invoke a breach of custody and maintenance to pursue a unilateral revocation of the Italian toll road concession of Autostrade per l'Italia (ASPI; the concessionaire), although the renegotiation of the concession could be considered as an alternative to its unilateral revocation. - Moreover, as a result of negative political sentiment towards Atlantia SpA--the toll road and airport operator that owns 88% of ASPI--we see a heightened risk that any renegotiated concession terms (including investment remuneration) will be less favorable to ASPI. - We do not assume a full revocation of the ASPI concession, however, because of the economic and financial impact such an action might have on the grantor based on the terms of the concession contract. - We are therefore...

Research Update