December 3, 2019 / 7:08 PM / 3 months ago

UPDATE 1-Moody's cuts Atlantia's rating to junk

(Adds details from Moody’s press release)

MILAN, Dec 3 (Reuters) - Credit rating agency Moody’s has downgraded Italian infrastructure group Atlantia to Ba1 from Baa3, pushing it into non-investment grade territory.

The group controlled by the Benetton family is grappling with the fallout of the collapse of a bridge operated by its motorway unit Autostrade per l’Italia (ASPI) last year. The disaster caused the death of 43 people.

In a statement published on Tuesday, Moody’s said it had also cut the rating on ASPI to Baa3 from Baa2, while it confirmed Atlantia’s airport operator Aeroporti di Roma at Baa2.

The outlook on all the ratings is negative.

“The downgrade of Atlantia’s and ASPI’s rating follows last’s week temporary closure of some bridges managed by Autostrade over safety concerns,” the rating agency said.

Atlantia temporarily shut a motorway operated by ASPI last week to make safety checks on two bridges.

The bridges are being investigated by prosecutors in a probe relating to allegedly falsified safety reports by employees at ASPI and Atlantia’s maintenance unit SPEA.

Following the bridge disaster Italy’s ruling coalition party 5-Star Movement asked for Atlantia to be stripped of its lucrative motorway concession.

The rating agency said ASPI’s concession contract provides for a specific process for an early termination procedure and recognises it the right to compensation.

However, Moody’s said any notification of non-compliance with the concession’s obligations or the start of a termination process for the concession could have a significant negative impact on Atlantia’s and ASPI’s credit profiles. (Reporting by Francesca Landini; Editing by Chris Reese and Jan Harvey)

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