Credit Rating case study

What was the context?

A privately owned tollroad operator with two outstanding public debt ratings was at risk of having its credit ratings lowered by multiple notches based upon its location in a jurisdiction with severe financial problems and weather-related damage.

What did we do?

Suzanne Smith assisted the company in its strategy and relationship with credit rating agencies. The strategy focused on building and presenting the case that the company had the ability to withstand various stresses: revenues, debt service coverage, and liquidity would remain adequate and over the medium and long term, the company would be unaffected by the negative events, thus supporting affirmation of the existing debt ratings.

She also assisted the company in the consideration of obtaining additional ratings, which the company proceeded to do.

What is the benefit to the client?

The company maintained its low investment grade ratings from one rating agency despite the problems in its jurisdiction. The company developed closer working relationships with other rating agencies and set the stage for better credit ratings in the future.

The company greatly improved its understanding of rating agency criteria. The company was successful in obtaining a new investment grade rating.