Rpt fitch places tube lines (finance) notes on rating watch negative

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April 4 (The following statement was released by the rating agency)Fitch Ratings has placed Tube Lines (Finance) PLC's GBP77m class B notes due 2031 on Rating Watch Negative (RWN). The notes' current rating is 'AA+'. The rating action follows the placement of Transport for London's (TfL; 'AA+'/RWN) ratings on RWN (see 'Fitch Puts 1 UK Local Government, TfL & 3 Oxford Colleges on RWN', dated 27 March 2013, available at this site).


The notes are credit-linked to TfL's ratings as they benefit from an irrevocable and unconditional guarantee from TfL. As such, Fitch considers that the only risk factor applicable to the rating is External Support, which was assessed as Stronger.

RATING SENSITIVITIES Given that TfL irrevocably and unconditionally guarantees the full discharge of Tube Line's debt service commitments, any change in TfL's rating would lead to a corresponding change in the notes' rating. The RWN on TfL's ratings indicates a heightened probability of downgrade in the near term. The transaction was originally a securitisation of the assets of Tube Lines Limited (TLL), which in December 2002 entered into a 30-year public private partnership contract with London Underground Limited to manage, renew and maintain the infrastructure on three London Underground lines (Jubilee, Northern and Piccadilly). TfL acquired TLL from Bechtel and Amey (Ferrovial) at end-June 2010 and subsequently simplified the financing structure.