S&P lowers Transurban, Sun

Standard & Poor’s said it lowered the long-term corporate credit and senior secured debt ratings on Transurban Finance Co. Pty. Ltd. to BBB+ from A-.

The outlook is stable.

The agency also said it lowered Sun Group Finance Pty Ltd.’s long-term corporate credit and senior secured debt ratings to BBB from BBB+.

The outlook on Sun Group Finance is stable.

Transurban recently announced that it reached an agreement with the Victorian government for the potential development and construction of the Western Distributor in Melbourne, S&P said.

Capital requirements for this project are said to be at least A$5 billion prior to any government contribution, the agency said.

Transurban also said it intends to maintain a balance between control over increased leverage linked to its development pipeline and steady shareholder-return growth, S&P said.

The downgrades reflect this higher-than-previously expected capital commitment, the agency said.

Sun Group Finance is the financing arm of Transurban, fulfilling a strategically important role for Transurban, S&P said.

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