OREANDA-NEWS. Fitch Ratings has stated that the 'BBB' rating on Indiana Finance Authority's (IFA) private activity bonds (PABs) on behalf of I-69 Development Partners LLP (I-69) is not affected by Fitch's recent downgrade of Grupo Isolux Corsan, S.A.'s (Isolux) or the recently announced end of the Isolux Infrastructure Netherlands B.V. (Isolux Infrastructure) partnership between Isolux and the Canadian pension investment manager, Public Sector Pension Investment Board (PSP). Isolux's IDR was downgraded to 'B' from 'B+' and was placed on Rating Watch Negative on Dec. 7, 2015. The performance and financial obligations of the I-69 Section 5 project's Design-Build (DB) contractor, Isolux Corsan LLC, are guaranteed by Corsan-Corviam Construccion S.A., an experienced construction firm and subsidiary of Isolux. Further, following the dissolution of Isolux Infrastructure, assets will be split between the two former partners, with PSP taking full control of I-69.

Fitch believes the rating on IFA's PABs will be unaffected by Isolux's downgrade given I-69's construction progress to date and the relatively straightforward nature of the remaining construction and relatively short remaining construction period. The project is currently 18 months into a 28-month construction period with a number of activities already completed. The remaining works largely involve at-grade road resurfacing and widening, improvements to existing structures, and the continued construction of a small number of additional new structures. Despite a delayed start to construction, the project company still expects to meet its substantial completion date of Oct. 31, 2016 and Fitch will continue to monitor construction progress going forward.

Fitch does not view the separation of Isolux and PSP as a credit risk, since the transaction will not affect any of the project's existing contracts and agreements. I-69 Development Partners LLC is a special purpose vehicle (SPV), ultimately owned and controlled by Isolux Infrastructure (51%) and Infra-PSP Canada Inc. (Infra PSP, 49%). Following Isolux and PSP's separation, PSP will take over full responsibility for the project's outstanding equity infusions. Fitch views PSP's large and diverse asset portfolio and its role as one of Canada's largest pension investment managers favorably.