Research Update: Ferrovial 'BBB/A-2' Ratings Affirmed And Removed From CreditWatch Developing; Outlook Stable

Ferrovial has confirmed its strategy, focused on construction and asset rotation in its infrastructure and concessions portfolio. Although significantly delayed, the disposal of its services business is under way, notably through the announced sale of Broadspectrum to Ventia, while Ferrovial now targets the disposal of the remaining assets by 2021. We expect the COVID-19 pandemic will affect dividends from airports, toll roads, and construction, but we believe the balance sheet offers material leeway to cope with the pandemic-related difficulties. We are therefore affirming our 'BBB/A-2' ratings on Ferrovial and assigning a stable outlook. We removed the ratings from CreditWatch with developing implications, where we had placed them on April 11, 2019. The stable outlook reflects our view that we expect

...- Ferrovial has confirmed its strategy, focused on construction and asset rotation in its infrastructure and concessions portfolio. - Although significantly delayed, the disposal of its services business is under way, notably through the announced sale of Broadspectrum to Ventia, while Ferrovial now targets the disposal of the remaining assets by 2021. - We expect the COVID-19 pandemic will affect dividends from airports, toll roads, and construction, but we believe the balance sheet offers material leeway to cope with the pandemic-related difficulties. - We are therefore affirming our '###/A-2' ratings on Ferrovial and assigning a stable outlook. We removed the ratings from CreditWatch with developing implications, where we had placed them on April 11, 2019. - The stable outlook reflects our view that we expect Ferrovial will maintain adjusted funds from operations (FFO) to debt of at least 45% over the next 18-24 months....

Research Update