Bridging North America General Partnership Ratings Affirmed, Outlook Negative Following Actions On Key Counterparty


  • Bridging North America General Partnership's (BNA's) entire design and construction risk and substantial operational risk are passed down (supported by a parent guarantee from Fluor Corp., as well as guarantees from the ACS and Aecon entities) through the concession term. Hence, the rating on the project is capped by the rating on Fluor Corp.
  • We affirmed our 'A-' rating on BNA and revised the outlook to negative, reflecting similar actions on Fluor Corp. on Oct. 29, 2018.
  • The negative outlook reflects our view that any downgrade on Fluor Corp. will trigger a change in the rating on Bridging North America General Partnership's notes.
TORONTO (S&P Global Ratings) Feb. 4, 2019--S&P Global Ratings today took the 
rating actions listed above. We revised the outlook to negative following a 
similar action on Fluor Corp., which is a critical counterparty for the 
project. The rating on Bridging North America is capped by creditworthiness of 
Fluor Corp., which acts as the project's stronger construction counterparty 
and irreplaceable operations counterparty. Fluor Corp. provides a parent 
guarantee to support the project's design and construction risk and 
substantial operational risk under a DB agreement and OMR contract, 
respectively. As a result, the rating on the project can be no higher than the 
credit quality of Fluor Corp. 

The negative outlook is in line with the outlook on key construction and 
operations counterparty Fluor Corp. and reflects the possibility that a 
downgrade on Fluor Corp. over the next 24 months will trigger a change in the 
rating on BNA. Nevertheless, we expect that the project will complete 
construction on time and within budget, given the very experienced 
construction contractor and the clear assignment of risk within the 
concession, along with adequate liquidity to sustain delays under our downside 
scenario. Thereafter, we expect operations to be characterized by well-defined 
responsibilities and stable availability-based revenues. Once the project is 
operational, we expect a DSCR minimum of 1.18x, with an average of 1.33x 
through life of the long-term debt.
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