Research Update: Nouvelle Autoroute 30 S.E.N.C. 'BBB+' Rating Affirmed; Outlook Remains Negative Following O&M Contractor Default

Following abrupt closure of business by Nouvelle Autoroute 30 S.E.N.C.'s (A30 Express') O&M provider, DeAngelo Brothers Corp. (DBC), in late October 2021, A30 Express took over the responsibility of the project's operation and maintenance (O&M) after failing to secure replacement contract with competitive terms. This has caused the project's O&M costs to shoot up by 100% during the time the project is embarking on its first pavement intervention cycle and high lifecycle costs and reserve funding period. Offsetting this is the robust growth (averaging 40% more than 2020 levels between July 2021 and March 2022) in A30 Express' truck traffic influenced by e-commerce and a truck ban on competitive road beginning July 1, 2021. While commuter travel remains correlated to

...- Following abrupt closure of business by Nouvelle Autoroute 30 S.E.N.C.'s (A30 Express') O&M provider, DeAngelo Brothers Corp. (DBC), in late October 2021, A30 Express took over the responsibility of the project's operation and maintenance (O&M) after failing to secure replacement contract with competitive terms. This has caused the project's O&M costs to shoot up by 100% during the time the project is embarking on its first pavement intervention cycle and high lifecycle costs and reserve funding period. - Offsetting this is the robust growth (averaging 40% more than 2020 levels between July 2021 and March 2022) in A30 Express' truck traffic influenced by e-commerce and a truck ban on competitive road beginning July 1, 2021. While commuter travel remains correlated to government stringency measures to curb infections, the growth in truck traffic almost completely mitigates the cashflow impact of higher O&M expenses. - As a result, S&P Global Ratings affirmed its '###+' rating on A30 Express'...

Research Update