European Infra Stable: Moody’s

The outlook for the European infrastructure sector over the next 12-18 months remains stable, despite downside risks, says Moody's Investors Service in a special comment published today.

"The stable outlook for the sector predominantly reflects Moody's expectation that infrastructure companies across Europe will experience a continued recovery from the difficult economic conditions of 2008-09, and that they will be able to obtain the funds necessary to meet capex and debt maturity commitments," says Andrew Blease, author of the report.

"This continues a trend evident over the past few years and proves the  robustness of the industry to very challenging economic and financial conditions. Consequently, we expect borrowers' fundamental financial profiles to be steady to improving over the next 12-18 months," continues Blease.

Moody's expects infrastructure sector-related trade and passenger volumes  to record low single-digit percentage growth as the European economy recovers. In addition, improving business trends will encourage management to invest in new capacity, which will increase funding requirements.

However, Moody's also notes the downside risk to financial profiles of borrowers in peripheral EU countries subject to significant austerity measures.

European Infrastructure Outlook is available on www.moodys.com.