Additionally, Fitch has also affirmed the 'BBB-' rating on the
The Rating Outlook remains Stable.
The rating reflects progress to date with the project on schedule, and with sufficient funding, to achieve completion prior to the long-stop date. Once operational the project will receive a stable revenue stream from a highly rated revenue off-taker in the
KEY RATING DRIVERS:
Experienced Contractor with Sufficient Security Package:
Completion Risk: Midrange
Availability Payments Supported by Strong Counterparty: Payments supporting construction and operations will be derived from The
Revenue Risk: Midrange
Low Operation Risk: Operational functions are expected to be self-performed by
Operation Risk: Midrange
Adequate Lifecycle Funding: A forward looking Major Maintenance Reserve and Handback Reserve are present to cover expected life cycle costs.
Infrastructure & Renewal Risk: Midrange
Fixed Rate, Fully Amortizing Debt with Standard Reserves: The debt service profile consists of fixed rate debt with no refinance risk. The covenant package is considered to be adequate, with debt service reserve funds equal to six months of debt service and a robust equity lock-up trigger of 1.20 times (x).
Debt Structure: Midrange
Sufficient Coverage Ratios although High Leverage: The projected average coverage in Fitch's ratings case is 1.28x and drops to a minimum of 1.16x, consistent with the assigned rating and peer group. Leverage is slightly elevated at 16x net debt to cash flow available for debt service in 2018.
--Construction delays beyond scheduled substantial completion and anticipated final acceptance dates if not properly mitigated could result in negative rating action;
--Significant payment deductions during construction and operations that reduce coverage levels well below current projections could result in negative rating pressure;
--Considerable deterioration of financial counter-parties leading to a weakening in the credit profile of the project could negatively impact the rating;
--Successful completion and sustained operating performance could result in a higher rating.
The PABs are secured by a first priority lien on NYNJ Link net revenues. The TIFIA Loan is secured on a subordinate basis. Senior lien bonds and the subordinated TIFIA loan will be paid from funds available in the
The lender's technical advisor (Arup) has opined that the project is on track to be completed prior to the long-stop date and that funding remains sufficient to complete the project. In its most recent report (
The commencement of the eastbound main span foundations is currently a critical focal point of the Project. The drill shafts and the cofferdam are the principle activities for the foundations on the
NYNJ Link reported no significant problems with the Project and expressed the view that overall the Project is proceeding as expected. The delay in the removal of the
Additional information is available at 'www.fitchratings.com'.
--'Rating Criteria for Infrastructure and Project Finance,' (
--'Availability-Based Rating Criteria' (
Rating Criteria for Infrastructure and Project Finance
Rating Criteria for Availability-Based Projects
Source: Fitch Ratings
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