Subway Operator Metropolitano de Lisboa Ratings Lowered To 'CCC+' On Portugal Downgrade; Outlook Negative
- We lowered to 'BB/B' from 'BBB-/A-3' our long- and short-term sovereign credit ratings on the Republic of Portugal on Jan. 13, 2012.
- We continue to assess the likelihood that Portuguese subway operator Metropolitano de Lisboa E.P. (Metro) would receive timely and sufficient extraordinary support from Portugal's government as "very high." Our assessment of Metro's stand-alone credit profile remains at 'cc'.
- We are lowering our long-term corporate credit and nonguaranteed issue ratings on Metro to 'CCC+' from 'B-', and removing them from CreditWatch negative.
- The negative outlook reflects the possibility that Portugal's financial capacity to support Metro could diminish further.
MADRID (Standard & Poor's) Jan. 17, 2012--Standard & Poor's Ratings Services today said it lowered its long-term corporate credit and nonguaranteed issue ratings on Portuguese state-owned subway company Metropolitano de Lisboa E.P. (Metro) to 'CCC+' from 'B-'. The outlook is negative. At the same time, we removed the ratings from CreditWatch with negative implications, where they were placed on Dec. 7, 2011. The outlook is negative. The downgrade follows a similar action on the Republic of Portugal (BB/Negative/B) on Jan. 13, 2012. The Republic of Portugal is the 100% owner of Metro, which we consider to be a government-related entity (GRE). In accordance with our criteria for rating GREs, we believe that there is a "very high" likelihood that Metro would receive timely and sufficient extraordinary support from the Portuguese government in the event of financial distress. We continue to assess Metro's stand-alone credit profile at 'cc'. Our opinion of a "very high" likelihood of support reflects our view that Metro:
- Plays a "very important" role for the Portuguese government through its public policy mandate; and
- Has a "very strong" link with its full owner, the Portuguese government.
The negative outlook reflects the possibility that Portugal's financial capacity to support Metro could diminish further. We could lower our ratings on Metro if we see that Portugal's credit profile continues to weaken and believe that the government may encounter obstacles to continue to provide Metro with funds to repay debt. Conversely, we would revise the outlook on Metro to stable from negative, if we see that Portugal's credit profile improves and that, in turn, the government has an increased ability to provide Metro with funds to face all its liquidity needs. RELATED CRITERIA AND RESEARCH
- General Criteria: Rating Government-Related Entities: Methodology And Assumptions, Dec. 9, 2010
- Methodology and Assumptions: Liquidity Descriptors for Global Corporate Issuers, Sept. 28, 2011
- Stand-Alone Credit Profiles: One Component Of A Rating, Oct. 1, 2010
- Use Of CreditWatch And Outlooks, Sept. 14, 2009
- How Standard & Poor's Uses Its 'CCC' Rating, Dec. 12, 2008
- Criteria Methodology: Business Risk/Financial Risk Matrix Expanded, May 27, 2009
- Parent/Subsidiary Links; General Principles;Subsidiaries/Joint Ventures/Nonrecourse Projects; Finance Subsidiaries;Rating Link to Parent, Oct. 28, 2004
- Portugal's Ratings Lowered To 'BB/B'; Recovery Rating Of 4 Assigned; Outlook Negative, Jan. 13, 2012
Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column. Alternatively, call one of the following Standard & Poor's numbers: Client Support Europe (44) 20-7176-7176; London Press Office (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; Stockholm (46) 8-440-5914; or Moscow 7 (495) 783-4009.
Primary Credit Analyst: | Lorenzo Pareja, Madrid (39) 02-7211-1214; lorenzo_pareja@standardandpoors.com |
Secondary Contact: | Eileen X Zhang, London (44) 20-7176-7105; eileen_zhang@standardandpoors.com |
Additional Contact: | International Public Finance Ratings Europe; PublicFinanceEurope@standardandpoors.com |
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