Research Update: Ferrovie dello Stato Italiane Affirmed At 'BBB' On Resilience To COVID-19 Impacts; Outlook Remains Negative

According to our updated forecasts on Italian state-owned rail and transportation group Ferrovie dello Stato Italiane (FSI), subdued traffic due to the COVID-19 pandemic could reduce the group's funds from operations (FFO) to debt, as adjusted by S&P Global Ratings, to 14%-15% in 2020-2022 from the 17%-18% we anticipated in July 2020. We consider that the group's revenue could benefit from about €1.2 billion-€1.3 billion extraordinary government support to compensate losses generated in 2020, and that the bulk of this support should be paid by the government in multi-annual tranches. We assume FSI will sign a new revolving credit facility (RCF) within the coming months in order to maintain a solid liquidity position, given the existing €2 billion RCF expires

...- According to our updated forecasts on Italian state-owned rail and transportation group Ferrovie dello Stato Italiane (FSI), subdued traffic due to the COVID-19 pandemic could reduce the group's funds from operations (FFO) to debt, as adjusted by S&P Global Ratings, to 14%-15% in 2020-2022 from the 17%-18% we anticipated in July 2020. - We consider that the group's revenue could benefit from about 1.2 billion-1.3 billion extraordinary government support to compensate losses generated in 2020, and that the bulk of this support should be paid by the government in multi-annual tranches. - We assume FSI will sign a new revolving credit facility (RCF) within the coming months in order to maintain a solid liquidity position, given the existing 2 billion RCF expires in July 2021. - We are therefore affirming our '###' long-term issuer credit rating on FSI, in line with our sovereign rating on Italy, and affirming our '###' issue rating on FSI's unsecured debt. - The negative outlook indicates...

Research Update