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Moody's has downgraded the ratings of the SH 130 Concession Company, LLC to Caa3 from B1, including the Senior Bank Facility with $686 million outstanding and the subordinate Transportation Infrastructure Finance and Innovation Act (TIFIA) loan with $493 million outstanding. Moody's said the rating outlook is negative.

A consortium of five European banks, led by Banco Santander of Spain, provided the senior bank debt. The others are Banco Espirito Santo and Caixa-Banco de Investimento of Portugal, Caja Madrid (Bankia) of Spain, and Belgium-based Fortis Bank.

SH130 Concession Company LLC is a limited liability company owned by Cintra TX 56, LLC (65%) and Zachry Toll Road 56, LP (35%). The project has a concession granted by the Texas Department of Transportation (TxDOT) for the southern-most tolled sections of SH 130, comprising 41 miles of a 90 mile bypass around the city of Austin, TX.

Moody's said that substantially weaker than forecasted traffic and revenue performance has caused a rapid deterioration in the Project's liquidity in 2013.

The new toll road that began operating in November 2012 performing below expectations. Since then, Moody's said, traffic and revenue show monthly growth, but not at rates necessary to generate sufficient revenue to meet operating and debt obligations through the June 30, 2014 debt service payment.

The firm is near full use of the $35 million liquidity facility to fund the June 2013 debt service payment. Moody's revised forecasts now indicate that nearly all of the $30 million of available contingent equity will be used to fund the December 2013 debt service payment and a part of the June 2014 debt service payment.

Moody's expects that the project will have insufficient cash to meet is debt service payments due in June 2014.

TXDOT has shown support for the toll road by subsidizing a one-year heavy truck toll discount and funding new signage in key areas north and south of the route to build awareness of the new 35 alternative and its current discount for large trucks.

The concession has a term of 50 years and there is 20-year concession tail after the current senior debt amortizes and the flexible repayment terms of the subordinate TIFIA loan.