― In our opinion, thanks to potential government support, the indicative issuer credit quality of the toll road issuers in our sample is generally strong, ranking at the forefront among corporate sectors.
― In our view the business risk profiles of toll road operators vary due to the differences in economic development of their catchment areas, the market share and irreplaceability of their network in the regions they cover, and the scale and efficiency of their own road networks.
― However, companies in this sector have similar financial risk profiles, most of which are at aggressive or highly leveraged levels, due to heavy capital investment, long payback periods and large ongoing capital expenditure. Notwithstanding that, their refinancing pressures are limited.
― We expect most of the provincial-level state-owned operators in the sample to receive a critical level of local government support, due to toll roads’ status as important transport infrastructure that can boost local economic development, and the generally limited number of toll road operators within a region.