S&P Affms Road Management Consolidated's Rtgs.

LONDON--(BUSINESS WIRE)--Standard & Poor's CreditWire 6/29/98-- Standard & Poor's today affirmed its triple-'B' underlying rating and triple-'A' insured rating on the UK165 million bond issued by Road Management Consolidated PLC (RMC).

The outlook on both ratings is stable. The bond proceeds were used to partly fund the construction of two U.K. roads schemes, the A1(M) and the A417/A419.

The insured rating reflects the unconditional and irrevocable guarantee of payment of scheduled interest and principal on the bonds provided by AMBAC. Standard & Poor's credit rating of AMBAC is based on the analysis of AMBAC's underwriting guidelines, capital adequacy and guarantee exposure.

RMC is a special purpose vehicle wholly owned by Road Management Group Ltd. (RMG) which in turn is ultimately owned by Amec PLC, Sir Alfred MacAlpine PLC, Brown & Root Limited (U.K. subsidiary of Halliburton) and Dragados y Construcciones SA.

The two road schemes are part of the U.K. government's design, build, finance and operate (DBFO) road program. Project revenues are based on shadow tolls paid by the U.K. government based on the volume of traffic in each road segment. The main features of the 2 road schemes are:

-- A1 (M): conversion to motorway standard and maintenance of a 21km stretch of the A1(M) between Alconbury and Peterborough in Cambridgeshire;

-- A419/417: upgrading and maintenance of the A419/A417 running 52km between Swindon and Gloucester, including the construction of bypasses around Latton, Cirencester and Stratton.

In connection with the underwriting surveillance of this transaction, Standard & Poor's has visited the site and completed a review of the second year (1997/98) of construction and operation of RMC. This review has highlighted the following risk factors:

-- disruption in the A1(M) works as a result of adverse weather conditions;

-- lower than expected traffic counts of passenger vehicles in the A1(M); and

-- potential increase in maintenance costs resulting for high level of freight vehicles

However, these risks are mitigated by the following factors: -- capability and experience of sponsors demonstrated by the opening of the A419/A417 to the public nine months ahead of schedule and completion expected in July 1998;

-- construction on the A1(M) still on program in spite of adverse weather conditions;

-- combined toll revenues in line with projections and operating income higher; and

-- sound operating performance and no award of penalty points in any of the roads this year.

The updated financial forecasts (May 1998) show overall debt servicing capacity remains satisfactory. The minimum post-tax cover ratios are 1.26 times (x) for the A417/419 and 1.19x for the A1(M).

OUTLOOK: Stable. As both schemes are cross-collateralized for the purpose of

underlying rating the impact of lower traffic on the A1(M) is offset by the stronger than expected performance on the A419/A417. None of the debt service coverage ratios have been breached and overall credit quality remains adequate. In spite of the effect of adverse weather conditions on the construction of the A1(M) Standard & Poor's expects the road to be completed to schedule. -- CreditWire

   CONTACT:  Ana Nogales, London, (44) 171-826-3619
              Michael Wilkins, London, (44) 171-826-3528