APRR manages more than 2,300km of toll roads in France, strategically located between Paris, Lyon and the Alps.
APRR's tariffs track 70% inflation, similar to other major European networks.
We believe APRR is well- equipped and sufficiently experienced to deliver its capex plan, including an additional EUR720 million extension and widening works from the 2015 Plan de Relance.
APRR's debt is typical of a corporate with unsecured non-amortising debt, mainly fixed-rate, and lacking material structural protection.
Robust free cash flow generation at APRR and scheduled debt amortisation at parent Eiffarie should help sustain moderate deleveraging.
(BBB+/RWN) and Sias SpA (BBB+/Stable), APRR's longer concession maturity and more resilient historical traffic performance underpin the higher rating.
In the year-to-date, prolonged severe strikes on the French railways will likely benefit APRR traffic this year; while the unions have warned that actions will continue into July, we expect the positive effect on toll road traffic to be reverted back once the strikes are over.
Following repayment of a large portion of Caisse Nationale des Autoroutes debt in 1H18, approximately 90% of APRR's gross debt is made up of capital market instruments; EIB debt and commercial paper make up the rest.
APRR's activities are exclusively focused on a core toll road network covering the eastern axis of France.
On the market for the operation of toll motorways, Eiffage is only running the Viaduc de Millau which is located at some distance from the APRR motorway network.
And finally, the companies have offered commitments to the French State in order to allay possible concerns that the vertical relationship between Eiffage and APRR might hinder new competitors on the market.