Research Update: HIT and Sanef 'BBB-' Ratings Affirmed; SACP Lowered To 'bbb+' On Protracted Deleveraging; Outlook Stable

Holding d'Infrastructures de Transport's (HIT)'s main toll road concession will expire in December 2031 at its subsidiary Sanef, and absent new assets to replace its cashflows, existing debt (€4.45 billion at HIT and €0.9 billion at Sanef) will need to be repaid by the end of the concession. The smaller concession, SAPN, expires in August 2033 (25% of HIT total EBITDA in 2021). On Jan. 11, 2023, HIT fully refinanced the €500 million due in 2023 through a similarly sized issuance maturing in 2030. In our view, this backloads the debt repayment profile, increasing our view of the company's tail risk, as we now expect HIT to start repaying its gross debt when the next maturities come due, in 2025-2026.

...- Holding d'Infrastructures de Transport's (HIT)'s main toll road concession will expire in December 2031 at its subsidiary Sanef, and absent new assets to replace its cashflows, existing debt (4.45 billion at HIT and 0.9 billion at Sanef) will need to be repaid by the end of the concession. The smaller concession, SAPN, expires in August 2033 (25% of HIT total EBITDA in 2021). - On Jan. 11, 2023, HIT fully refinanced the 500 million due in 2023 through a similarly sized issuance maturing in 2030. In our view, this backloads the debt repayment profile, increasing our view of the company's tail risk, as we now expect HIT to start repaying its gross debt when the next maturities come due, in 2025-2026. Previously, we anticipated that refinancing would be less than the debt maturities. - We expect HIT will continue to benefit from robust cash flow generation at its subsidiaries and we estimate S&P Global Ratings-adjusted funds-from-operations to debt will be at 21%-23% in 2023-2025 on a consolidated...

Research Update