|
| |
PARIS (AFX) - Standard & Poor's Corp lowered to 'D'
from 'C' its long-term rating on Eurotunnel SA's 240 mln stg senior secured bank
loan, due 2012.
At the same time, the rating was removed from
CreditWatch where it was placed on Feb 9, 2004, the credit ratings agency said.
'The downgrade follows today's default on the scheduled
interest payment of about 350,000 eur on a tranche of the senior secured bank
debt,' said Standard & Poor's credit analyst Jan Willem Plantagie.
'Although the payment was ordinarily payable yesterday,
given it was a bank holiday in France the payment requirement moved to today,'
Plantagie said.
Eurotunnel confirmed it has sufficient cash to make the
payment, but will not be making it following the Aug 2 decision by the Paris
commercial court to grant the Channel tunnel operator protection from creditors
under France's new safeguard procedure, S&P said.
The 'C' debt ratings on the nonguaranteed Class A, B,
and C notes issued by Eurotunnel's special-purpose vehicle Fixed-Link Finance BV
(FLF1) remain on CreditWatch with negative implications, the agency added.
The 'C' long-term debt rating on Fixed-Link Finance 2
BV's nonguaranteed senior secured notes also remains on CreditWatch with
negative implications, it said.
If no agreement is reached by Feb 2007, and the French
court prolongs the stay on Eurotunnel's debt payments, the debt rating on FLF 2
will be lowered to 'D', and MBIA Assurance SA, which guarantees 620 mln stg of
FLF2's 740 mln of notes, will be required to step in to make the payments, S&P
said.
FLF 1 has dedicated reserve facilities available and
the risk of an imminent is lower than at FLF 2, the agency said.
On July 13, S&P cut its ratings an all Eurotunnel's
loans by five notches from 'BBB' to 'C', a junk status rating, following the
breakdown of negotiations between Eurotunnel and its creditors.
'Negotiations between Eurotunnel and its creditors will
continue, although now with the involvement of judicial administrators,'
Plantagie said, adding. 'We will continue our discussions with management and
monitor developments.'
Eurotunnel's total borrowings amount to about 6.2 bln
stg or more than 9 bln eur.
| |
|
