Ventia Services Pty Ltd.

The stable outlook reflects our expectation that Ventia will maintain its solid position in the outsourced O&M market with stable operating performance. Our classification of Ventia as a financial sponsor-controlled company caps our financial risk assessment, with the recent debt-funded acquisition of Broadspectrum indicating a higher financial risk appetite. We expect the company to operate with an adjusted debt-to-EBITDA ratio of less than 5x. Our calculations for Ventia's adjusted debt-to-EBITDA ratio don't deduct accessible cash and liquid investments from debt given that the company is partly owned by a financial sponsor. We expect Ventia to remain as a moderately strategic joint venture to CIMIC Group and our base case does not factor in any potential changes in shareholding. A downgrade

...Ventia Services Pty Ltd.'s business risk profile is underpinned by its exposure to the telecommunications sector in Australia and New Zealand. Ventia has a solid position within the outsourced O&M market, covering a broad range of services. These include motorway and tunnel services, road networks, environmental remediation, water utilities, electricity distribution networks, and social infrastructure. Ventia should generate good free operating cash flow over the next 12 months. The company's services-oriented, capital-lite business model will continue to help drive strong cash flow conversion. Capital expenditure (capex) represented about 1.5% of revenues on average over the past five years and will likely track between A$40 million and A$80 million over the next 12 months. The higher credit quality of the CIMIC Group will continue to support the rating on Ventia. We continue to view Ventia as part of CIMIC Group, which is a core entity of the broader Spanish construction group, Actividades...

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