RELIANCE RAIL MEDIA STATEMENT
Reliance Rail confirmed that today’s rating action by Moody’s Investors Service has no impact on the delivery of the Waratah fleet and the first train is on schedule to enter passenger service in late 2010.
Today’s action on Reliance Rail’s credit rating was precipitated by continuing uncertainty in the financial guaranty industry and the ongoing challenges faced by Reliance Rail’s financial guarantors.
“Like many other infrastructure projects around the world, Reliance Rail has been
exposed to changes in the international debt markets, particularly the rating downgrades of the financial guarantors, stemming from the Global Financial Crisis,” Reliance Rail CEO Mr Terry Kearney said.
“Reliance Rail will continue to monitor the position of the financial guaranty industry and has plans in place to manage its commercial arrangements should the position of its financial guarantors change.”
The project’s financial arrangements, which were established in 2006, remain in place. Today’s action also has no impact on Reliance Rail’s ability to fulfil its contractual obligations to the Downer EDI Rail-Hitachi construction joint venture.
Reliance Rail obtained approximately $2.4 billion in debt and equity in 2006 to fund the manufacture of 78 trains, a suite of training simulators and a fleet maintenance facility. Of this funding, 85% is drawn and the remaining 15% is committed and will be drawn down progressively from early 2012.
Refinancing of Reliance Rail’s debt would not begin until 2015, two years after the last Waratah train is delivered.
“Our immediate focus is manufacturing and delivering 78 trains, the first of which is on schedule to enter passenger service in late 2010,” Mr Kearney said.
Moody’s Investors Service today downgraded Reliance Rail’s senior debt credit rating to Ba1.
ENDS
For more information, telephone Reliance Rail Communications Manager Kate Burrows on 0400 273 783.