OREANDA-NEWS. March 12, 2015. Fitch Ratings has affirmed CTRL Section 1 Finance plc's (CTRLF) notes as follows:

GBP748m senior secured notes due 2035: affirmed at 'AA+', Outlook Stable
GBP500m index-linked senior secured notes due 2051: affirmed at 'AA+', Outlook Stable

CTRLF is a securitisation of certain de-risked track access charges (TACs) and domestic capacity charges (DCCs) payments in respect of section 1 of the Channel Tunnel Rail Link. Following a restructuring implemented in 2009, TACs (which were originally payable by Eurostar (U.K.) Ltd, guaranteed by the UK government (HMG; AA+/Stable/F1+)) and DCCs (originally payable by the Secretary of State) are irrevocable and unconditional direct obligations of HMG.

KEY RATING DRIVERS
The ratings of CTRLF's notes rely on HMG and, as such, are credit-linked to the UK sovereign rating. Fitch considers that the only risk factor applicable to the rating is external support, which was assessed as Stronger.

RATING SENSITIVITIES
Given that HMG irrevocably and unconditionally funds and guarantees the TACs and DCCs, any change in HMG's rating will lead to a corresponding change in the notes' rating.

The TACs and DCCs are considered to be sufficient to service the rated notes, given the sculpted nature of the cash flows, which, at deal inception, were structured to closely match the principal and interest payments under the notes.

SUMMARY OF CREDIT
In 1996 London and Continental Railways was selected as the winning consortium to construct the Channel Tunnel Rail Link (CTRL) under a private finance initiative agreement. Section 1 of the railway opened in September 2003 and section 2 to the newly-restored St Pancras Station opened in November 2007. The company was restructured and transferred to the Department for Transport in mid-2009. In 2010, HMG sold a 30-year concession to operate the entire CTRL (now known as High Speed 1) to a private consortium consisting of Ontario Teachers' Pension Plan and Borealis Infrastructure.