Moody's trims Transport for London

Moody's Investors Service said it downgraded Transport for London's (TfL) long-term senior unsecured debt ratings to A3 from A1.

“The downgrade reflects Moody's conclusion that TfL's intrinsic financial strength has been durably and materially weakened by the pandemic, and that the limited level of financial support provided by the government of the United Kingdom (Aa3 stable), and the absence of clarity on ongoing financial support arrangements, at a time when TfL faces a long-lasting shortfall in ridership post pandemic, signals that this erosion in its financial strength is unlikely to be reversed,” the agency said in a press release.

“TfL's adjustment to a weaker, less supportive operating environment will be challenging and may involve significant cuts to operating and capital expenditures that undermine the value of its service and hence its revenue base and that raise costs in the longer term. In most scenarios, TfL's financial strength will be diminished,” Moody’s said.

The outlook remains negative.

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