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Fitch Ratings affirms SIAS S.p.A.'s IDR at 'BBB+'.

Milan: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, affirmed Italian toll road operator SIAS S.p.A.'s Long-Term Issuer Default Rating (IDR) at 'BBB+'. The Outlook is Stable.

SIAS's strong liquidity position and well-established relationships with a diversified network of national and international banks mitigate refinancing risk. The rating reflects solid traffic performance on the group's network and moderate leverage, which we expect to remain below 4x, a level commensurate with the rating in the context of the portfolio's short average concession tenor of below 10 years.

Regulatory risk has receded, which gives us more visibility of tariff evolution. We also view positively the possible extension of the A4 Turin-Milan concession - 30% of consolidated EBITDA - as it slightly increases the average maturity of group concessions. SIAS is the second-largest Italian toll road operator, managing a network of 1,358km that is critical for the mobility of wealthy north-west Italy. Traffic is 76% light vehicles covering a mix of short and medium distances. Traffic in vehicle km experienced a peak to trough of 12% in 2012-2013 as austerity measures led to a collapse in domestic consumption. This is broadly similar to Autostrade per l'Italia (ASPI, -11%) but weaker than Autostrada Brescia Verona Vicenza Padova (ABVP, -8%).

The concession framework is robust as it links tariff hikes to inflation and capex execution, partially de-linking group cash flow generation from negative traffic performances. The tariff suspension or cap in 2015-2017 was settled in the context of the recent approval of regulatory business plans.

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Date:Jun 27, 2018
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