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Australian Utilities Subject To Distant Ownership Risks And The Infrastructure Funds Phenomenon Mar 06
Standard & Poors, March 2006
Abstract
Essential natural-monopoly infrastructure assets with reliable, transparent, and supportive regulatory regimes have been commoditized, and have become desirable traded assets in an expanding global market. Major retail and distribution assets of Australia's CitiPower Trust (CitiPower; A-/Negative/--), for example, have been sold four times, including its privatization in 1999. Nevertheless, such appealing characteristics can expose these businesses to exogenous factors that directly affect credit quality. Factors that heavily determine the credit risks to obligations at inherently stable and reliable utilities include ownership (whether local or distant), group structure, and underlying credit quality. At the same time, an emerging key credit factor is the credit profile of infrastructure funds, particularly features of the net capital (debt and equity) of these funds. This...
Companies mentioned in this report are: Hutchison Whampoa Ltd.,Powercor Australia, LLC,Cheung Kong Infrastructure Holdings Ltd.,CitiPower Trust (The),ETSA Utilities Finance Pty Ltd.,DUET Group,MAp Airports,Alinta Infrastructure Holdings,SP AusNet Group
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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