S&P cuts Road Management bond to negative

Standard & Poor's said that it revised the outlook on the £165 million senior secured bond due 2021 issued by Road Management Consolidated plc to negative from stable. S&P affirmed the B+ long-term issue rating on the bond.

The bond retains an unconditional and irrevocable guarantee provided by Ambac Assurance Corp., covering payment of scheduled interest and principal.

The bond proceeds were used partly to fund the construction of two shadow toll roads in the United Kingdom.

Overall, the economic recovery in 2010 appears to have had a positive effect on the level of heavy goods vehicle traffic on both roads, the agency said. However, other vehicle traffic, constituting the majority of both volumes and revenues, fell on both roads over the same period.

The company continues to benefit from a strong liquidity position, the agency said. This partly offsets the project's weak financial profile.

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