Research Update: Aurizon Operations Ltd. Assigned 'BBB+' Rating On Announced Restructure Of Aurizon Group; Outlook Stable

Australia-based integrated freight railway operator Aurizon Holdings Ltd. has announced it will restructure the group and separate the above-rail operations (Aurizon Operations Ltd.; AUO) and below-rail operations each as 100% direct subsidiaries. AUO will benefit from its dominant market position in the Queensland coal-haulage market, good footprint in New South Wales, and its strong financial profile with minimal leverage. On Aug. 12, 2019, S&P Global Ratings assigned its 'BBB+' long-term issuer credit rating to AUO. This factors in our view that AUO remains an integral part of the Aurizon group; hence our view on the group caps the rating on AUO. The stable outlook reflects the inherent flexibility available to AUO to moderate distribution, and management's target of maintaining metrics

...- Australia-based integrated freight railway operator Aurizon Holdings Ltd. has announced it will restructure the group and separate the above-rail operations (Aurizon Operations Ltd.; AUO) and below-rail operations each as 100% direct subsidiaries. - AUO will benefit from its dominant market position in the Queensland coal-haulage market, good footprint in New South Wales, and its strong financial profile with minimal leverage. - On Aug. 12, 2019, S&P Global Ratings assigned its '###+' long-term issuer credit rating to AUO. This factors in our view that AUO remains an integral part of the Aurizon group; hence our view on the group caps the rating on AUO. - The stable outlook reflects the inherent flexibility available to AUO to moderate distribution, and management's target of maintaining metrics within the rating expectations for AUO as well as the group....

Research Update