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Aug 5 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has assigned Salini S.p.a.’s (BB/Stable) EUR400m 2018 senior unsecured bond a final ‘BB’ rating.
The senior unsecured bond rating is in line with Salini’s Issuer Default Rating (IDR), based on the assumption that the merger between Salini and Impregilo will be completed, as Fitch considers the possibility that the merger will not go ahead as very unlikely. However, if the merger is stopped for any reason, the bond rating would likely be notched down from the IDR, reflecting its structural subordination to the senior unsecured debt of Impregilo. After the merger, the bond would still be structurally subordinated to the operating companies’ (including Todini) debt, none of which is the bond’s guarantor. However, Fitch deems this structural subordination not to be material.
Positive: Future developments that could lead to positive rating actions include:
- Liquidity remaining comfortably above 1.25x on a sustained basis.
- FFO net leverage to improve to 1.0x or below on a sustained basis.
Negative: Future developments that could lead to negative rating action include:
- Liquidity score below 1.1-1.2x on a sustained basis.
- FFO net leverage above 2.0x.
- Evidence of poor performance on major contracts with a material impact on profitability.