Bangkok--30 Oct--Standard & Poor's
SYDNEY (Standard & Poor's) Oct. 30, 2013--Standard & Poor's Ratings Services said today that it has assigned its 'BBB+' preliminary rating to the A$3.75 billion in senior secured debt to be issued by Aquasure Finance Pty. Ltd. The outlook on the debt is stable.
Aquasure Finance Pty. Ltd. (Aquasure Finance) is the financing vehicle of Aquasure Pty. Ltd. (Aquasure), the project company that is responsible for the design, construction, financing operation, and maintenance of the Wonthaggi water desalination plant under a public-private partnership (PPP) with the Australian State of Victoria, expiring in September 2039. Construction of the plant was successfully completed in late 2012, and the plant is now capable of delivering more than 150 GL of water per year.
The 'BBB+' preliminary rating and stable outlook on the A$3.75 billion of senior secured debt reflect our view of the expected predictable and stable cash flows that the project will receive from the Victorian government through a largely availability-based payment regime. In our view, the project's two critical credit drivers are its exposure to operating risks and its highly leveraged debt structure, but we believe that adequate mitigants are in place to adequately manage those risks.
"The stable outlook on our rating of the senior secured debt issued by Aquasure Finance reflects our view of the expected stability and predictability of the project's cashflows," said credit analyst Thomas Jacquot. "The outlook also reflects our expectation that, should the plant be called to produce desalinated water, Aquasure and the O&M joint venture will appropriately manage the start-up process to ensure that the plant can run at the desired throughput level. Further, we believe that, following the settlement of all the construction-related claims as part of the refinancing, Aquasure will seek to strengthen its relationship with all the constituents on the state government side in order to ensure that all parties jointly cooperate in the establishment of a long-term partnership that will likely define the ultimate success of this project."