The ratings on Australian-based Leighton Holdings Ltd. reflect the company's leading market position in Australia's infrastructure construction and contract mining sectors; significant business, industry, project, and geographic diversity; favorable operational track record; and intermediate financial risk profile. The rating also reflects the weaker credit quality of Leighton's parent; an inherent exposure to the competitive and cyclical-heavy engineering and construction (E&C) sectors; and the performance risks related to mining contracts, and large, complex E&C projects. Standard&Poor's Ratings Services believes that Leighton's German-based parent Hochtief AG (not rated) could adversely influence Leighton's credit quality in the event of significant financial stress at Hochtief. In our view, Hochtief's business profile and financial metrics are weaker than Leighton's on a standalone basis.
