Industry Report Card:

Investors' Appetite For Infrastructure Assets Boosts EMEA Project Finance

Primary Credit Analyst: James Hoskins, London (44) 20-7176-3393; james.hoskins@standardandpoors.com Secondary Contacts: Watcharee Corkill, London (44) 20-7176-7020; watcharee.corkill@standardandpoors.com Michela Bariletti, London (44) 20-7176-3804; michela.bariletti@standardandpoors.com

Table Of Contents
Industry Ratings Outlook Project Finance Companies Return To The Capital Markets The Existing Portfolio Maintains Stable Credit Quality Rating/Outlook Distribution Social Infrastructure In Particular Looks Set For A Resurgence Issuer Review Recent Rating Activity Contact Information Related Criteria And Research

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Industry Report Card:

Investors' Appetite For Infrastructure Assets Boosts EMEA Project Finance

Industry Ratings Outlook
Project finance bond issuance is surging in Europe, the Middle East, and Africa (EMEA) in 2013 as infrastructure programs look to the capital markets to supplement and/or replace traditional bank financing, which is being curtailed by tighter regulation in the region. What's more, issuers are adopting a number of different funding structures, leading to varying rating outcomes. In Standard & Poor's Ratings Services' view, these competing structures serve to diversify the industry because capital market issuance is no longer reliant on a single funding structure. As a result, we look to a more buoyant period for the industry and anticipate stable creditworthiness while this new wave of issuance unfolds. Since our last report card, "Industry Report Card: New Finance Structures Set To Spur A Revival Of Debt Issuance In The Project Finance Industry," published on May 29, 2013, on RatingsDirect), we've assigned a number of preliminary ratings to new projects that have construction risk. These are the first new project finance bonds with construction risk issued in EMEA since 2007, and demonstrate investors' returning appetite for infrastructure assets. Overview EMEA project finance issuance has soared this year because of curtailed bank lending and increased appetite for infrastructure assets. In the six months to Sept. 30, 2013, the credit quality of our rated portfolio of project finance assets deteriorated slightly, with the proportion of investment-grade projects falling to 70% from 78%. Even so, we view the credit outlook for the sector as stable. New transaction structures offer issuers a wider array of funding options and increasing competition. Social infrastructure projects, such as schools and hospitals, will likely be the main beneficiaries of the new wave of issuance. The benefits felt by project finance companies should in our view ensure stable creditworthiness for the industry into 2014.

Project Finance Companies Return To The Capital Markets

After a long hiatus, project finance companies in EMEA have this year issued a significant amount of new capital market debt. A number of the transaction structures adopted have been proven viable from a funding perspective. This is important for the market's resilience and competitiveness because it provides project sponsors with a number of different avenues to access the capital markets. By contrast, when project finance capital market issuance last peaked,

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in 2007, U.K PFIs were almost totally reliant on monoline guaranteed debt and there was little issuance outside of the U.K. and only a small number of large projects in the Middle East. The only alternative to monoline guaranteed debt was secured bank lending. In the reporting period, we have assigned new ratings to two accommodation projects that benefit from monoline guarantees. These projects-- Holyrood Student Accommodation Plc and Sustainable Communities for Leeds (Finance) PLC--are both guaranteed by Assured Guaranty (Europe) Ltd.; currently the only monoline guarantor active in the U.K. market. In the same period, two new student accommodation projects were financed using bonds that do not benefit from a guarantee from a monoline, which we rate at 'A-/Stable'. These projects (ULiving@Hertfordshire and UPP Bond 1 Issuer PLC) are the first unwrapped project finance bonds issued to fund social infrastructure in the U.K. Furthermore, Ruwais Power Co.'s $800 million bond issuance signaled the return of the Middle Eastern market for project bonds. This year also saw Watercraft Capital S.A. issue the first bond through the European Investment Bank's (EIB's) Project Bond Credit Enhancement initiative. (For more details of the various features of these transactions, see "How To Unlock Long-Term Investment In EMEA Infrastructure," published Oct. 4, 2013, and "University Student Accommodation Projects Are Satisfying Investor Appetite For Long-Term Infrastructure Debt," published July 30, 2013. A number of proposed structures are still being developed. These include the U.K. government's Guarantee Scheme and the U.K. Education Funding Authority's public sector borrowing aggregator. A number of European countries such as Italy, have implemented legislative changes to attract institutional investors. We have yet to rate any debt issuances using these structures. We also recently rated the first project finance transaction in the Republic of Slovakia (GRANVIA a.s.) at '(prelim) BBB+/Stable'. GRANVIA issued the debt to refinance the senior bank loans it drew to finance construction works on the R1 motorway in South West Slovakia.

The Existing Portfolio Maintains Stable Credit Quality

We have taken a number of rating actions in the past two quarters, the most notable of which are outlined below. Three entities became "fallen angels", that is, we downgraded them to speculative grade ('BB+' and lower) from investment grade ('BBB-' and higher). We lowered our long-term issue ratings on Healthcare Support (Newcastle) Finance PLC to 'BB+' from 'BBB-' and assigned it a stable outlook. The downgrade followed the issue of a second warning notice by the Newcastle-Upon-Tyne Hospitals National Health Service (NHS) Foundation Trust as a result of disputed penalty points issued in relation to the angiography room at the Royal Victoria Hospital. We downgraded Spanish toll-road project operator Autovia del Camino S.A. to 'BB+' from 'BBB-' on weaker traffic growth prospects. Finally, we lowered the long-term issue ratings on Norway-based asset company Njord Gas Infrastructure AS (NGI) to 'BB' from 'BBB+' following the announcement by the Norwegian Ministry of Petroleum & Energy (MPE) on June 27, 2013, that it would amend transport tariffs on the majority of future capacity bookings for the Gassled network. As a

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result of the announcement by MPE, we also took a negative rating action on the bonds issued by Solveig Gas Norway AS (Solveig), lowering our ratings on the entity to 'BBB-' from 'BBB+' and assigning it a negative outlook. On the flip side, we raised the issue ratings on Alpha Schools (Highland) Project PLC to 'BBB+' from 'BBB' and assigned them a positive outlook. This followed an improvement in the working relationships between the transaction parties, as well as in the project's operational performance over the six months prior. We also raised our ratings on Consort Healthcare (Mid Yorkshire) Funding PLC to 'BBB/Stable' from 'BBB-/Positive' following its recent, more robust operating performance. In addition, we raised the long-term issue ratings on Ajman Sewerage (Private) Co. Ltd. to 'BB+' from 'BB' to reflect its stronger financial profile.
Table 1

Financial Statistics Of The Rated European Project Finance Portfolio -- Education

--Ratings---Reserves-Leverage (senior debt/total capital) 90% --Financial profile-Current average/min. DSCR: ProjectCo's 1.31x/1.26x

SPUR Alpha Schools (Highland) Project PLC Catalyst Higher Education (Sheffield) Discovery Education PLC InspirED Education (South Lanarkshire) PLC Transform Schools (North Lanarkshire) Funding PLC BBB+

Long-term Outlook rating Positive BBB+/ Positive

Debt service support Other reserves 6 months DSRA Lifecycle: 3 years (100%/50%/25%);CIL

Current average/min. DSCR: S&P's 1.28x/1.24x

Default covenant 1.05x

Dis tes

1.15

BBB

Negative AA-/Stable

6 months DSRA

MRA 3 years; working capital reserve

89%

1.44x/1.16x

1.37x/1.15x

1.05

1.13

BBB

STABLE

BBB/Stable

6 months DSRA

Lifecycle: 3 years (100%, 66%, 33%);CIL

91%

1.23x/1.14x

1.21x/1.13x

1.05x

1.15

BBB-

Stable

BBB-/Stable 6 months DSRA

Lifecycle: 3 years (100%, 66%, 33%);CIL: 9 mil. funded in 2009

92%

1.24x/1.16x

1.20x/1.11x (0.99x exc CiLF)

1.05x

1.10

BBB

Stable

BBB/Stable

6 months DSRA

MMR: 90% 100%/83%/67%/50%/33%/17% of each six-month period of lifecycle costs.;CIL 2 mil.

1.20x/1.16x

1.18x/1.13x

1.05x

1.12

DSCR--Debt service coverage reserve. DSR--Debt service reserve. EIB--European Investment Bank. SPUR--Standard & Poor's Underlying Rating. SPV--Special purp vehicle. RCF--Revolving credit facility. NOK--Norwegian krone. N/A--Not applicable. NR--Not rated.

Table 2

Financial Statistics Of The Rated European Project Finance Portfolio -- Housing

--Ratings---Reserves-Leverage (senior debt/total capital) 90% --Financial profile-Current average/min. DSCR: ProjectCo's 1.45x/1.18x

SPUR Exchequer Partnership (no. 2) PLC A-

Long-term Outlook rating Stable AA-/Stable

Debt service support

Other reserves

Current average/min. DSCR: S&P's 1.41x/1.17x

Default covenan 1.05x

6 months Lifecycle: 3 years DSRA (100%/66.6%/33.3%) prefunded CIL:3 mil. (indexed)

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Table 2

Financial Statistics Of The Rated European Project Finance Portfolio -- Housing (cont.)
Integrated Accommodation Services PLC Keele Residential Funding A Stable AA-/Stable 6 months Lifecycle: 3 years; CIL: 8 DSRA mil. prefunded 6 months MRA none at Acceptable Uni. Rating, otherwise 5-year forward-looking; 2 mil. deferred premium rev.; 1.1 mil. stamp-duty rev. 90% 1.36x/1.20x 1.32x/1.18x 1.05x

A-

Positive

AA-/Stable

98%

1.66x/1.43x

1.60x/1.36x

N/A

RMPA Service PLC Services Support (Manchester) Ltd. Aspire Defence Finance PLC

BBBBBBBBB+

Stable Stable Positive

BBB-/Stable BBB-/Stable BBB+/Positive

9 months DSRA 6 months DSRA 6 months DSRA

Lifecycle: 3 years (100%/50%/25%); CIL Lifecycle: 2-year forward-looking

91% 93%

1.24x/1.14x 1.29x/1.11x 1.38x/1.33x

1.24x/1.11x 1.26x/1.10x 1.35x/1.31x

1.05x 1.05x 1.05x

MRA: 92% 100%,66%33%;LRA-35mil.; IRA-20 mil.; SPV cost reserve account-10 mil. 3-year forward looking sinking fund (100%, 66%, and 33%) 3-year forward-looking 100%, 66%, and 33% 77%

UPP Bond 1 Issuer

A-

Stable

A-/Stable

6 months

1.76x/1.32x

1.49x/1.28x

1.05x

Holyrood Student Accommodation PLC

BBB

Stable

AA-/Stable

6 months

82%

1.43x/1.26x

1.39x/1.22x

Sustainable Communities for Leeds (Finance) PLC

BBB-

Stable

AA-/Stable

6 months

3-year forward-looking 100/66/33 3-year forward looking sinking fund

89%

1.25x/1.24x

1.24x/1.23x

1.10x

Uliving@Hertfordshire A-

Stable

A-/Stable

6 months

75%

1.79x/1.66x

1.79x/1.64x

1.10x

DSCR--Debt service coverage reserve. DSR--Debt service reserve. EIB--European Investment Bank. SPUR--Standard & Poor's Underlying Rating. SPV--Special purp RCF--Revolving credit facility. NOK--Norwegian krone. N/A--Not applicable. NR--Not rated.

Table 3

Financial Statistics of the Rated European Project Finance Portfolio -- Healthcare

--Ratings---Reserves-Leverage (senior debt/total capital) --Financial profile-Current average/min Current DSCR: average/min ProjectCo's DSCR: S&P's 1.29x/1.23x 1.24x/1.19x

SPUR Catalyst Healthcare (Romford) Financing PLC BBB-

Long-term Outlook Rating Stable AA-/Stable

Debt service support 6 months DSRA

Other reserves

Default covenant 1.05x

Distri test 1.15x

Lifecycle:3 yrs 92% (100%/67%/33%);CIL

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Table 3

Financial Statistics of the Rated European Project Finance Portfolio -- Healthcare (cont.)
Central BBB Nottinghamshire Hospitals PLC Stable AA-/Stable 6 mths DSRA Lifecycle:3 years (100%, 66%, 33%);CIL:Prefunded 60% of construction completion;MRA : 100%/66%/33% MRA: 100/66/33 91% 1.22x/1.16x 1.18x/1.16x 1.05x

1.125x

Consort Healthcare (Birmingham) Funding PLC Coventry & Rugby Hospital Co Healthcare Support (Newcastle) Finance PLC

BBB-

Stable

BBB-/Stable

6 mths DSRA

92%

1.23x/1.20 x

1.19x/1.13x

1.05x

1.12x

BB+

Stable

BB+/Stable

6 months prefunded 6 months,funded from subdebt,drawn down March 2010 6 months DSRA

Lifecycle:3 years (100%/25%/25%); CIL Lifecycle Reserves:3 years (100%/66%/33%); CIL

91%

1.21x/1.15x

1.12x/1.05x

1.05x

1.15x

BB+

Stable

BB+/Stable

93%

1.26x/1.19x

1.21x/1.16x

1.05x

1.15x

Octagon Healthcare Funding PLC

BB+

Stable

AA-/Stable

Lifecycle: 3 years (100%, 66%, 33%)

90%

1.44x/1.15x

1.36x/1.06(Inc. 1.05x All reserving): 1.36x/1.04x (incl. contractual reserving only) 1.17x/1.15x 1.05x

1.12x

The Walsall Hospital Company PLC

BBB

Stable

AA-/Stable

6 mths DSRA

Lifecycle:3 years (100%, 66%, 33%);MRA: 100/66/33;Cil Lifecycle:3 years (100%/50%/25% );CIL:50%of ProjectCo's max liability;MRA: 100/50/25 Lifecycle:3 years (100%, 67%, 33%)

90%

1.22x/1.20x

1.12x

By Chelmer PLC BBB|GLBP|

Stable

BBB-/ Stable

6 mths DSRA

90%

1.23x/1.14x

1.20x/1.10x

1.05x

1.125x

The Hospital Co. (Swindon & Marlborough) Ltd |GLBP| Catalyst Healthcare (Manchester) Financing PLC

BBB+

Stable

BBB+/Stable

6 months DSRA

90%

1.32x / 1.15x (Dec-2012)

1.28x/1.14x (Dec-2012)

1.05x

1.10x

BB+

Positive

BB+/Positive

6 mths DSRA

MRA: 100%/66%/33%; CIL:1 mill rising to 50% of total liability on completion

89%

1.29x/1.20x

1.24x/1.15x

1.05x

1.15x

DSCR--Debt service coverage reserve. DSR--Debt service reserve. EIB--European Investment Bank. SPUR--Standard & Poor's Underlying Rating. SPV--Special purp vehicle. RCF--Revolving credit facility. NOK--Norwegian krone. N/A--Not applicable. NR--Not rated.

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Table 4

Financial Statistics of the Rated European Project Finance Portfolio -- Transport

--Ratings---Reserves-Leverage (senior debt/total capital) --Financial profile--

SPUR AUMANCHA B

Outlook Long-term rating Stable AA-/Stable

Debt service support 12 months

Other reserves 3 year forward-looking MRA:; (Min trapped extra cash of c. 6.7 mil. claw-back cash rev. 3-year forward-looking MRA;7.5% LC & 3% retention bond; 1-year forward-looking (Sr.) MRA 58% of revenue cashed in directly in a special account for sr debt service

Current Current average/min average/min DSCR:ProjectCo's DSCR:S&P's 1.57x/1.38x

Default covenan N/A

80% 1.75x/1.47x (debt/equity)

Amey Lagan Roads Financial Autolink M6

BB

Stable

BB/Stable

6 months

86% 1.22x/1.08x (debt/equity)

1.17x/1.06

1.05x

BBB-

Stable

AA-/Stable

6 months

N/A

1.87x/1.23x

1.81x/0.9x

N/A

Autovia del Camino

BB+

Stable

BB+/Stable

12 months

N/A

1.41x/1.12x

1.38x/1.09x

N/A

County Route (A130) DirectRoute (Limerick)

B+ BB-

Negative B+/Neg( Sr.);B-/C,W.Neg(Sub) Negative BB-/Neg

6 months 6 months

4-year N/A forward-looking MRA Guaranteed a min traffic level (although before price is known), 3 mil. CIL N/A

1.18x/0.98x 1.18/1.09x

1.03x/0.70x 1.12x/1.03x

N/A N/A

Highway Management M1 Ostregion

BBB

Stable

AA-/Stable

6 months

3 year 87% 1.32x/1.17x forward-looking MRA (debt/equity) MRA 18 months 88% ;100%/60%/30%;Gtd revenue to keep DSCR at least 1.05x. 5-year forward-looking MRA; Cash of 50.7m (as of June 2010) plus 11.3 in L/Ds. N/A < 1.05x in several periods

1.25x/1.11x

N/A

B+

Neg

B+/Neg

6 months

1.07x/1.01x

N/A

Road Management Consolidated

Stable

B/Stable

12 months (6 month cash funded and remaining 6 months by LOC) 12 months

consd.1.15x/1.11x A1(M):1.11x/1.06x , A419:1.24x/1.16x

consd.1.10x/1.04x N/A A1(M):1.06x/1.00x , A419:1.22x/1.06x

Verdun Participation

BBB-

Stable

A1 and B1: BBB-/Stable; A2 and B2: AA-/Stable A-/stable

5-year 89% 1.45x/1.22x (2045) forward-looking MRA (debt/equity)

1.36x/1.18x (2045) 1.05x

High Speed Rail Finance 1 PLC

A-

Stable

12 months

N/A

Leveraged structure in the region of 80/20

1.65x/1.49x

1.48x/1.37x

1.05x

DSCR--Debt service coverage reserve. DSR--Debt service reserve. EIB--European Investment Bank. SPUR--Standard & Poor's Underlying Rating. SPV--Special purp RCF--Revolving credit facility. NOK--Norwegian krone. N/A--Not applicable. NR--Not rated.

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Table 5

Financial Statistics of the Rated European Project Finance Portfolio -- Utilities

--Ratings---Reserves-Leverage (senior debt/total capital) N/A --Financial profile-Current average/min Current DSCR: average/min ProjectCo's DSCR: S&P's N/A Above 1.05x

SPUR Alte Liebe 1 Limited B-

Long-term Outlook rating Stable B-/Stable

Debt service support 12 months of interest at the SPV

Other reserves Fixed DSCR covering first year of DS (increasing coverage above 12 months overtime) + 1-year O&M reserve account Additional reserves will be funded over time

Default covenant N/A

Distribution test

1.25x lock-up

Breeze Finance S.A. (Breeze Three)

Stable

B/Stable (senior); C/Stable (junior)

6 months for senior tranche and 3 months for junior tranche (fully used)

N/A

N/A

Class N/A (A):1.44x/1.07x; Class (B): 1.08x/0.80x

1.2x senior, 1.15x junior

CRC Breeze BFinance S.A. (Breeze Two)

Stable

B-/Stable 6mths for (senior); senior tranche C/Stable(junior) (74.6% used), 3mths for junior tranche (fully used) BB+/Stable 12 months DSR

Additional reserves will be funded over time

N/A

N/A

Class N/A (A):1.40x/1.14x; Class (B): 1.10x/0.90x

1.2x senior, 1.15xjunior

Ajman Sewerage Co. Ltd.

BB+

Stable

N/A

N/A

1.40x

Above 1.8x from 2014 1x

1.05x

1.40x

Belfast Gas A Transmission Financing PLC

Stable

AA-/Stable

6 months interest and principal forward-looking

MRA: None; 100% debt 4 mil. guarantor operating account (cash buffer), 5.2 m standby liquidity facility MRA: none; NOK 250mil. RCF (with refinancing risk, but adequately mitigated) 66% (rising to about 80%)

2x

1.2x

No distributio allowed

Njord Gas IFR

BB

Stable

BB/Stable

12 months interest only (amortization of the bond may be deferred for 18months) 6 months

1.23x/0.84x

None

1.2x forward-looki DSCR

Premier A Transmission Financing PLC Ras Laffan Liquefied Natural Gas Co. Ltd. (3) Ras Laffan Liquefied Natural Gas Co. Ltd. (II) A

Stable

AA-/Stable

MRA: 1.8 100% debt million (adjusted for future maintenance) N/A N/A

2x

1x

1.25x

No distributio allowed.

Stable

A/stable

N/A

12.3x ('13) , 4.4x ('14)and 13.3x('15) N/A

12.3x ('13) , 4.1x N/A ('14)and 12.4x('15) Above 5.5x until N/A 2013 and 4.2x in 2014

N/A

Stable

A/stable

N/A

N/A

N/A

N/A

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Table 5

Financial Statistics of the Rated European Project Finance Portfolio -- Utilities (cont.)
Solveig Ruwais Power Co. PJSC (Shuweihat 2) BBBANegative BBB-/Negative Stable A-/Stable 6 months 6 months N/A 75% debt 2.63x 1.21x/1.20x 1.26/1.11x 1.20x/1.18x 1.40x 1.05 DSCR 1.20x DSR 1.10 DSCR After the 80% fixed-price operating period, a funded MRA is required dependent on future cost forecasting 1-year forward looking sinking fund 81%

Watercraft Capital S.A.

BBB

Negative BBB/Negative

Next semi-annual debt service. Partially funded at issuance. Rest covered by letter of credit

1.31x/1.31x

1.30x/1.30x

1.05 DSCR

1.20x DSCR

DSCR--Debt service coverage reserve. DSR--Debt service reserve. EIB--European Investment Bank. SPUR--Standard & Poor's Underlying Rating. SPV--Special purpose vehicle. RCF--Revolving credit facility. NOK--Norwegian krone. N/A--Not applicable. NR--Not rated.

Rating/Outlook Distribution
Of the 110 project finance issues that we rate, 75% were investment grade on Sept. 30, 2013 (see chart 1), compared with 80% on March 31, 2013. Since the end of the first quarter of 2013, the proportion of investment-grade rated issues in the portfolio has decreased by approximately 4%. In the six months to Sept. 30, 2013, we added five new project finance companies to our rated portfolio. We assigned new issue ratings to Holyrood Student Accommodation Plc, Ruwais Power Co. PJSC (Shuweihat 2), Watercraft Capital S.A., Sustainable Communities for Leeds (Finance) PLC, and ULiving@Hertfordshire (see table 7). We also withdrew our rating on Northland Resources A.B. at the issuer's request, following a default.

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Chart 1

The creditworthiness of 70% of projects reflected by their Standard & Poor's Underlying Ratings (SPURs) as of Sept. 30, 2013, was investment-grade (see chart 2)--lower than the 78% recorded on March 31, 2013. To us, this indicates a slight deterioration in the credit quality of our rated portfolio of EMEA project finance assets. The bulk of the downgrades related to the change in the tariff regime on the Gassled network and does not, in our view, reflect any overall trend for the portfolio as a whole.

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Chart 2

We raised four issue ratings related to three projects in the six months to Sept. 30, 2013, compared with six issues in the previous six months. However, we also lowered the ratings on nine issues, four of which related to the debt issued by Njord Gas Infrastructure AS. This compares with seven downgrades in the previous six months (see chart 3).

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Chart 3

In terms of rating distribution, as of Sept. 30, 2013, 8% of the portfolio (about nine issuers) had a negative outlook. At the same date, 85% had a stable outlook, a marked improvement from the 73% at the end of March 2013. On the other hand, we had a positive outlook on six issues at the end of the third quarter of 2013, down from 11 issues at the end of March 2013 (see chart 4).

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Chart 4

Since our last report card, there are fewer SPURs with negative outlooks Seven issues (less than 10%) had a negative outlook on Sept. 30, 2013, compared with nine issues (about 10%) on March 31, 2013. At the same time, 81 issues (84%) retained a stable outlook at the end of September 2013, compared with 68 issues (53%) at the end of March 2013 (see chart 5).

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Chart 5

Social Infrastructure In Particular Looks Set For A Resurgence

Thanks to a number of government and non-government initiatives reviving investor appetite for infrastructure debt, we believe the project finance sector will enjoy a buoyant 2014. Social infrastructure will likely take center stage, with schools and hospitals, and other assets such as transportation and renewable energy projects, being more readily financed with capital market debt. As a result, our outlook on the industry for the rest of the year is stable.

Issuer Review
Table 6

Issuer Review
Company Catalyst Higher Education (Sheffield) PLC Rating* AA-(Insured)/Stable, BBB(SPUR)/Negative Country U.K. Analyst James Hoskins Comments The project has continued to deliver strong operational performance. It has incurred limited deductions and maintained strong relationships. Positively, Sheffield University reported strong applications for places for the 2013/2014 academic year and occupancy for the academic year is above 99%.

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Table 6

Issuer Review (cont.)

Exchequer Partnership (No. 2) PLC AA-/Stable, A-(Spur)/Stable U.K. Mike Wilkins The project, covering the refurbishment of government offices in Whitehall, London, has maintained a stable operating performance since 2004. There have been minimal financial deductions applied to the hard and soft facilities management (FM) service providers, neither of which are considered material for the rating. More variations are expected in the coming years due to increased occupancy levels as a part of the government's strategy to increase efficiency and generate savings in its estates. Positively, these have been handled well until now with no adverse impact on the operations or on relations. Our base-case forward looking annual debt service coverage ratio (ADSCR) was 1.19x minimum occurring in June 2013, with a 1.48x average, as per the June 2013 model. The project, which finances new accommodation facilities at the U.K. Government Communications Headquarters, continues to deliver a stable operating performance with minimal availability and performance deductions. Outstanding operational issues related to a failure in the chilled water system and power losses have been rectified with no impact to ProjectCo. The humidification issues affecting the building have led to some minor deductions, which have been passed through to the FM contractor G4S. We believe that the risk associated with latent defects due to the expiry of the 10-year latent defect insurance earlier this year is mitigated to a large degree by regular building surveys and extra testing at full capacity to stress the condition of the building. Based on the March 2013 financial model, our contractual minimum ADSCR is 1.18x occurring in March 2014, with an average at 1.42x. The project continues to perform strongly thanks to the support of Keele University and a robust contractual foundation. The university has come up with a revised proposal for the Hawthorn site, which will be used to construct new houses, the sales proceeds of which the university will use to construct 453 rooms in two blocks. Though we had expressed some concern over a potential decline in international student applications given the tightening of the U.K. visa policies, the university sees steady and robust student applications. We expect this trend to continue in 2014 as well, given the high number of students that the university attracts for its business school courses. Financial performance continues to be strong with contractual ADCSRs of 1.49x minimum and 1.68x average (average of 1.62x without interest income). The project has continued to perform in line with expectations with minimal deductions and stable operations. Relations with concession grantor Greater Manchester Police Authority remain good, despite increasing pressure on the authority to implement cost savings as part of a restructuring program. This program along with the findings of the Deloitte strategic review could lead to some operational challenges in the future, including increased capital and maintenance works over the next two years. The lifecycle underspend will continue to be monitored. The TA, however, regards the lifecycle provisions as adequate considering the current condition of the buildings. The financial profile remains aggressive but adequate liquidity is provided through fully funded reserve accounts. As per the September 2012 model, the ADSCR is 1.29x average and 1.14x minimum, and 1.13x minimum without interest income.

Integrated Accommodation Services PLC

AA-/stable(Insured), A(Spur)/Stable

U.K.

Mike Wilkins

Keele Residential Funding PLC

AA-(Insured)/stable, A-(spur)/Positive

U.K.

Mike Wilkins

Services Support (Manchester) Ltd.

BBB-/Stable

U.K.

Mike Wilkins

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT

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Table 6

Issuer Review (cont.)

UPP Bond 1 Issuer PLC A-/Stable U.K. Mike Wilkins To date, the project has operated in line with our forecasts, with occupancy at, or close to, 100% at all participating companies, and minimal performance or availability deductions. Rental indexation for the 2013-2014 academic year has been higher than previously modeled with the exception of Broadgate Park at the University of Nottingham, where rent discounts of between 5%-10% have been offered to returning students (2nd and 3rd year students) to improve occupancy. That said, the impact of the discounts on the rental income received from the overall portfolio has been negligible, with the forecast ADSCR for 2013/2014 declining slightly to 1.31x, from 1.32x as previously modeled. The final rating was assigned in July after financial close. The project is in the process of developing accommodation for postgraduate students in Edinburgh and we expect construction works to be completed to specification, on time and within budget with the first stage (Holyrood South Hall) forecast to be delivered by September 2014. In May 2013, ULiving@Hertfordshire PLC (ULiving) issued 143.5 million of senior secured bonds due July 31, 2054 to finance the development, maintenance, and operation of student accommodation at the College Lane Campus of the University of Hertfordshire (UoH). The bonds will be repaid from rental income on student accommodation. To date, construction works are reported to have been carried out smoothly. Phase I is on course to be completed in time for the next academic year in Sept. 2014- in line with our expectations and the construction programme. Rental income is guaranteed by UoH during the construction period, which provides greater stability during the construction and start-up periods. The project involves the construction, refurbishment, and maintenance of approximately 1,700 social housing dwellings in Leeds under a 20-year project agreement with Leeds City Council. The recently assigned issue rating reflects our view of the weak creditworthiness of the construction contractor, Keepmoat Ltd. However, this is offset to some extent by the strong security package available to ProjectCo during construction. The credit quality of the construction contractor is the main constraint.

Holyrood Student Accommodation Plc

AA-(insured)/Stable, BBB(SPUR)/Stable

U.K.

Mike Wilkins

ULiving@Hertfordshire

A-/Stable

U.K.

Mike Wilkins

Sustainable Communities for Leeds (Finance) PLC

AA-/Stable, BBB-(SPUR)/Stable

U.K.

Manuel Dusina

Defence Aspire Defence Finance PLC BBB+/Positive(insured), BBB+(SPUR)/Positive U.K. James Hoskins Good progress continues to be made on the competed price works with no material issues or delays reported. In our opinion, interim services are being executed successfully with negligible deductions, which, in any case, have been passed through to the relevant subcontractors in full. Aspire continues to progress investigations and remedial works in relation to a number of heating and hot water failures that occurred over the last few years and continues to make progress in reaching commercial settlements with its insurers. Aspire Defence Finance continues to maintain a strong relationship with the Ministry of Defence and financial performance remains in line with expectations.

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT

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Table 6

Issuer Review (cont.)

RMPA Services PLC BBB-(insured)/Stable; BBB-(SPUR)/Stable U.K. James Hoskins The project has continued to deliver strong operational performance with minimal deductions. The technical advisor (TA) continues to note that life-cycle works are being well delivered, slightly under budget, and that the buildings are in very good condition. Despite a number of meetings during the latter part of 2012, we understand that there has not yet been any agreement with the Her Majesty's Royal Customs on the project's tax liabilities. Positively, the financial model includes the currently agreed tax liabilities without taking into account any reduction that RMPA is seeking.

Education Alpha Schools (Highland) Project PLC BBB+ (insured)/Positive, BBB+(SPUR)/Positive U.K. Manuel Dusina The project, to build and maintain 11 new schools in the Scottish Highlands, continues to deliver a relatively stable operational performance with a low level of performance deductions reported. As the facilities have only a limited operating history since the completion of construction, some "teething issues" have been reported as operational services stabilize to a steady state delivery while planned life cycle works have been relatively minor to date. Financial performance for the year to Jan. 31, 2012 was ahead of budget and reported cash balances are healthy. Recently upgraded following the resolution of most of the outstanding issues that had been causing friction between the various transaction parties. Consequently, the working relationships between the transaction parties, as well as the project's operational performance, have improved over the past six months. The project continues to operate strongly with a low level of performance and availability deductions. The construction contractor has completed works to ensure that shower and toilet pods achieve the minimum contracted temperatures in winter. The project reports that strong relationships have been maintained between the parties and the TA also reports no significant issues in its most recent semi-annual report. Financial performance remains in line with our expectations. The project schools have continued to perform well with limited deduction levels aside from two unavailability events in February and March. These led to deductions of 2000 and 3,200, respectively. InspirED continues to operate in line with its budgets for running costs and reactive maintenance. Relationships are reported by all parties to be strong with no major issues reported at present. Financial performance remains in line with our current forecast. The project has continued to operate strongly with a low level of deductions. As the schools are all recently constructed, there is only a minimal planned life-cycle spend over the next five years. The TA reports that relationships remain strong between the project, its subcontractors, and the local authority. There have been only a low number of building defects reported during the past six months and the project continues to deliver financial performance in line with our expectations.

Discovery Education PLC

BBB (insured)/Stable, BBB(SPUR)/Stable

U.K.

James Hoskins

InspirED Education (South Lanarkshire) PLC

BBB-(Insured)/Stable, BBB-(SPUR)/Stable

U.K.

James Hoskins

Transform Schools (North Lanarkshire) Funding PLC

BBB(Insured) /Stable, BBB(SPUR)/Stable

U.K.

James Hoskins

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT

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Table 6

Issuer Review (cont.)

Health care Capital Hospitals (Issuer) PLC AA-/Stable(insured), BBB-(SPUR)/Stable U.K. Manuel Dusina Construction performance is, in our view, satisfactory for a complex project of this nature. Phase 1a of the Royal London Hospital was successfully handed over on Oct. 31, 2011. Phase 1 of St Bartholomew's Hospital is also complete, with Phase 2 slightly ahead of its scheduled completion in 2014. We note a material improvement on the relationship front. In our view, the catalyst for the change has been the retrospective investigation exercise which has brought ProjectCo and the Trust closer and has stimulated cooperation. A head of terms, wrapping all commercial issues outstanding, was signed in March 2013, and it was converted into a deed in July 2013. Within the deed, there is also an agreement for the soft FM to be brought in house by the Trust by 2017, adopting a phased approach. In our view, this will de risk ramp up and operation phases. Financials are robust, especially now that retail price index (RPI) level favors the project, but volatility cannot be underestimated. Overall, remedy of construction defects is going well and an agreement has now been reached regarding the majority of the historical unavailability deductions between LLPM&C and the Trust. Sodexo's overall quality of services has improved. The draft documents to amend the service failure points (SFPs) trigger have been issued to funders and Sodexo. Legal advice is awaited. We believe the current state of operations, is reinforcing the satisfactory working relationships between the parties and the project's financial performance, and stabilizing the project. The hospital continues to operate well. Reported financial deductions over the past three months have remained low, with a minimal level of SFPs. Planned maintenance tasks are reported to have been completed as scheduled with no new material construction defects being noted. Financial performance continues to be in line with our expectations. The project continues to deliver strong operational performance with no deductions since October 2008, despite the operational and financial challenges facing the Trust. The Trust has confirmed that its working with ProjectCo, Sodexo, and Siemens on numerous cost-saving initiatives to help reduce the Trust's deficit. Most of the clinical recommendations made in 2011 by the Care Quality Commission (CQC), a government health inspector, have been dealt with. Significant improvements have been made by the Trust across maternity & radiology services and the Trust's proposals over the Accident & Emergency department over which there were serious concerns, have also been sent to the commission, marking the end of the CQC investigation. The minimum and average DSCRs based on the March 2013 model were 1.23x and 1.29x, respectively. However, the project still remains exposed to future variations in RPI.

Catalyst Healthcare (Manchester) Financing PLC

BB+(insured)/Positive, BB+(SPUR)/Positive

U.K.

Manuel Dusina

BY Chelmer PLC (Chelmsford Hospital)

BBB-(insured)/Stable, BBB-(SPUR)/Stable

U.K.

James Hoskins

Catalyst Healthcare (Romford) Financing PLC

AA-(Insured)/Stable, BBB-(spur)/Stable

U.K.

Mike Wilkins

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT

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Table 6

Issuer Review (cont.)

Central Nottinghamshire Hospitals PLC AA-(Insured)/Stable, BBB(spur)/Stable U.K. Mike Wilkins The Project continues its phase of stable operations. The biggest operational concern was the upkeep of the retained facilities, for which the ProjectCo. is responsible for hard and soft FM services. Even though this still continues to be a potential risk, it's been mitigated to an extent with all parties agreeing to the Schedule 38, which will enable the ProjectCo to claim relief from deductions if the retained facilities have not attained Condition Bstatus. The Trust's performance is the main credit driver for the Project. In July 2013, the Monitor served the trust a notice to fix failings in patient care and improve hospital governance. We believe that there is a "very high likelihood" that the government would provide extraordinary support through the NHS. The Project's financial profile is in line with our expectations, with Standard & Poor's ADSCR of 1.18x and a minimum of 1.14x. The disagreement with UHBFT on unavailability deductions related to construction defects in the mortuary, skin labs, and pneumatic tubes facilities will be settled through an agreement expected to be signed before the end of 2013. The deductions for mortuary facility have been passed through to the CJV while the ones for skin labs and pneumatic tubes facilities (circa 1.3 million) still rest with the ProjectCo. which will pass through the cost in full to the CJV. An agreement is currently under negotiation . We expect this commercial agreement to result in ProjectCo being refunded for some of the deductions as well as the company formalizing a number of construction variations delivered under a performance development plan and additional value-added works totaling 5.5 million. We also expect the agreement to clarify the drafting around certain elements of the payment mechanism. Project upgraded in May 13 reflecting our view of improved operating performance, demonstrated by a significant drop in the number of service failure points (SFPs) reported, compared with the previous period. In addition, since the appointment of a new interim CEO at the Mid Yorkshire Hospitals NHS Trust (Trust), we believe that the relationship between it and ProjetCo has improved, which in our view supports the current rating. A new ProjectCo manager has been appointed in Sep 13. We expect this appointment to continue a partnering style relationship with the trust. Consort Healthcare's financial performance is in line with our forecast. The project continues to perform in line with expectations. No major defects have been reported and minor defects are promptly addressed by the building contractor. Hard FM services provision continues to be strong, with low levels of SFPs and deductions. ADSCRs, as per our criteria, in the new operational model of 1.24x minimum and 1.27x average remain strong in our view, when compared with peers.

Consort Healthcare (Birmingham) Funding PLC

BBB- (insured)/Stable, BBB-(SPUR)/Stable

U.K.

Mike Wilkins

Consort Healthcare (Mid Yorkshire) Funding PLC

BBB(Insured) /Stable, BBB(SPUR)/Stable

U.K.

Manuel Dusina

Consort Healthcare (Salford) Plc

BBB+(Insured)/ Stable, BBB+(SPUR)/Stable

U.K.

James Hoskins

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT

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Table 6

Issuer Review (cont.)

Consort Healthcare (Tameside) Plc BBB+/Stable (insured), BBB+(SPUR)/Stable U.K. James Hoskins The project continues to operate in line with our expectations, with limited deductions and no material latent defects reported. However, currently, the major risk to the Project's rating is the potential deterioration in credit quality of the Tameside Hospital National Health Service Foundation Trust, the issuer's main revenue source, given the financial and governance concerns raised by the various regulatory bodies. This may constrain the underlying rating on the project should the Trust fail to resolve these concerns in a timely manner. However, the Trust has implemented a recovery plan and is improving its financial position. In our view, despite the robust ADSCRs, without interest income, of 1.27x minimum and 1.30x average, positive rating action is limited until the credit quality of the project's main revenue source--the Trust--remains under pressure. Overall, delivery of both soft and hard facilities management (FM) services appears to have stabilized. This is reflected in the trend of SFPs accrued, which is now steady and consistently below contractual threshold levels. A number of issues are still to be addressed, however, as ProjectCo reports that the Trust has become steadily more demanding, especially with respect to soft FM, and cleaning in particular. Work to the angiography room, the result of a previous dispute with the Trust that led to the issuance of two warning notices, was completed in mid-September. Consequently, both warning notices and all associated SFPs were withdrawn. The ongoing dispute over the clinical office block remains to be resolved, however, although discussions appear to be at a relatively advanced stage. The construction contractor continues to accrue liquidated damages, which have now reached a total of almost 1.5 million, of which 700,000 is still outstanding. Operationally, performance continues to be satisfactory and, over the six months to the end of August 2013, the level of SFPs and deductions appears to have stabilized at a low level. Construction was completed on schedule in June 2012, marking a 100% step-up to the unitary payment. Although Sodexo has generally performed well, it recently reported a significant amount of deductions due to problems in its cleaning and portering services. The outlook revision reflects our view that the project has a higher level of operating risk than we previously anticipated. This risk is evident from the accumulation of a sufficient number of SFPs for portering and cleaning at the University Hospital of North Staffordshire (UHNS) to trigger warning notices. Financials are in line with our expectations. A small number of defect rectification tasks are still to be completed, with the external re-cladding works the only material issue, due to continue into 2014. No significant operational issues to report. Penalties and SFPs remain low compared with contractual thresholds across all services. Innisfree completed the purchase, from Taylor Woodrow Construction, of the minority share in the project it didn't already own in August 2013, and is now the sole owner of the project.

The Coventry & Rugby Hospital Co. PLC

BB+/Stable (insured), BB+(SPUR)/Stable

U.K.

Robin Burnett

Healthcare Support (Newcastle) Finance PLC

BB+(insured)/Stable, BB+(SPUR)/Stable

U.K.

Robin Burnett

Healthcare Support (North Staffs) Finance PLC

BBB-/Positive (insured), BBB-(Spur)/Positive

U.K.

Manuel Dusina

NewHospitals (St. Helens and Knowsley) Finance PLC

AA-(Insured)/Stable, BBB-(SPUR)/stable

U.K.

Robin Burnett

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT

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Table 6

Issuer Review (cont.)

Octagon Healthcare Funding PLC AA-(Insured)/stable, BB+(SPUR)/stable U.K. Robin Burnett The project continues to operate well, in our view. ProjectCo reports occupancy remains very high. Service levels, however, also remain high. The 12-year latent defects period ended in August 2013. A detailed survey was carried out ahead of this date, raising three issues that are being taken forward by ProjectCo with the original constructor. ProjectCo also carried out a review of forecast lifecycle expenditure. This could result in some, relatively minor, revisions to forecasts that will be incorporated in the next financial model update, due in December 2013. We understand that ProjectCo is in the process of finding a replacement after Broofield's announced its intention to sell its hard FM contract. Although this may represent some operational risk during the transition, we do not believe that this will have a negative bearing on the project issue rating. In our opinion, there is a wide field of replacements, the nature of operations is not complex, and the liquidity in the project is sufficient to withstand the transition. The full unitary payment continues to be made on time by the trusts. SFPs have stabilized at levels well below the thresholds that could trigger warning notices and far below the termination threshold. The few performance deductions have been fully passed through to the respective subcontractors, leaving ProjectCo unaffected. The project maintains stable operating performance and benefits from high occupancy levels leading to a suspension of the performance regime. Though operationally the TA considers the issue of pin-holing of pipework as a "high risk" given the possibility of large areas of the asset becoming unavailable due to a major failure, there haven't been any unavailability events or deductions because of it for the past year as the ProjectCo and Carillion are prioritising their work on it. Given the better-than-expected condition of assets, the project has revised its lifecycle cost forecasts downward resulting in an improvement in the Standard & Poor's ratio, which now stands at an average of 1.32x and a minimum of 1.19x. The downward revision of lifecycle costs has been approved by the controlling creditor and its TA. Walsall Hospital Co. continues to operate in line with our expectations, with limited deductions and no material latent defects reported. ProjectCo continues to monitor and audit services to ensure compliance with the contract requirements. No material issues have been identified from recent audits. Financial performance continues to be in line with our expectations.

Peterborough (Progress Health) PLC

BBB-(insured)/Stable; BBB-(SPUR)/Stable,

U.K.

Lemos, Maria

The Hospital Co. (Swindon & Marlborough) Ltd.

BBB+(insured)/Stable, BBB+(SPUR)/Stable

Channel Islands

Mike Wilkins

The Walsall Hospital Co. PLC

AA-(Insured)/stable, BBB(Spur)/stable

U.K.

James Hoskins

Transport Amey Lagan Roads Financial PLC BB(insured)/Stable ; BB(SPUR)/Stable U.K. Robin Burnett ProjectCo continues to deliver stable operations, led by a new management team. The independent technical adviser also reports satisfactory operational performance. The project's sponsors are currently engaged in discussions with the aim of reducing the interest margin on the European Investment Bank loan, and hence improve the project's financial profile.

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT

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Table 6

Issuer Review (cont.)

Autolink Concessionaires (M6) PLC AA-/Stable(insured), BBB-(SPUR)/Stable U.K. Lemos, Maria Toll revenues remain relatively insensitive to the subdued traffic performance. This is in large part due to the project's banding mechanism, which introduces revenue protection subject to minimum thresholds of traffic movements for light and heavy vehicles. Based on the latest traffic movements, we think that there is still a considerable cushion available until returning to Band 1 for both OVs and heavy vehicles (HVs) (17% and 16% decrease required respectively). This, in turn, makes this project largely immune to moderate-to-strong traffic declines in the foreseeable future, in our view. Costs in 2012 remained on budget and the repair works progress as expected. Traffic in the 12 months to April 2013 decreased by 5% for light vehicles (LV) and 4.1% for HVs compared with the previous year. Although this year-to-date traffic performance is weaker than we had previously anticipated (flat traffic for the whole year 2013), it is offset by a 3% toll increase, which is considerably above our baseline expectations. Operating costs have remained well in line with budget. Our updated base-case assumptions for traffic are for a decrease of 4% in LVs and 6% in HVs for 2013, and flat growth for 2014. From 2015, we forecast long-term traffic growth of 1.5% Operationally, the project has continued to perform well. Traffic volumes have shown a marked improvement since the completion of roadworks (not related to the project), with monthly average daily traffic volumes over the six months to the end of Sept 2013 averaging monthly growth of 5.0% for the northern section of the scheme and 11.6% for the southern section. We continue to await the receipt of an updated financial model, containing both revised traffic forecasts and an updated major maintenance expenditure profile. Traffic volumes for the seven months to the end of July 2013 have shown strong growth over 2012, and continue to extend the pattern of growth beginning around mid-2011. Average daily traffic levels for this period are 4.2% up on the same period for 2012. This is encouraging, but is still 29% below guaranteed levels. Full remote operation of the second toll booth plaza at Clonmacken finally began on Jan. 21, 2013. Savings have resulted, however. Tolling costs remain stubbornly above budget, although this is offset by other savings realized elsewhere. There are no significant issues to report, with few penalty points accrued and operations generally stable. We understand that the negotiation between the concessionaire Bonaventura and the key project parties concluded with the ratification at the end of February 2013 in the terms anticipated in our latest Research Update, published on Feb. 1, 2013. This includes the sale of participation rights and control to mezzanine debt holders, the subordination of mezzanine principal and interest and the release of the last payment of the construction contract to the contractor. Traffic in the whole year 2012 performed above our baseline forecast, with light and heavy vehicles growing by 7% and 3.8% respectively vis-a-vis 2011. Year-on-year traffic evolution in the first quarter of 2013 shows a deceleration, however, with light vehicles still growing at 3.8% but heavy vehicle traffic remaining virtually flat.

Autovia del Camino S.A.

BB+/Stable, BB+(SPUR)/Stable

Spain

Lemos, Maria

CountyRoute (A130) PLC

Senior unsecured B+/Neg; ICR B-/WatchNeg

U.K.

Robin Burnett

DirectRoute (Limerick) Finance Ltd.

BB-/Negative (insured), BB-(SPUR)/Negative

Ireland

Robin Burnett

Highway Management (City) Finance PLC Ostregion Investmentgesellschaft Nr. 1 S.A.

AA-(Insured)/Stable, BBB(SPUR)/Stable B+(Insured)/Negative, B+(spur)/Negative

U.K. Austria

Robin Burnett Maria Lemos

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT

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Table 6

Issuer Review (cont.)

Road Management Consolidated PLC B(insured)/Stable, B(SPUR)/Stable U.K. Robin Burnett For the first half of 2013, traffic volume growth on the A419/417 road was broadly in line with budget and above national trends. However, as it has been in the past, traffic volume growth on the A1(M) road was below budget and national trends. Day-to-day operations continue to be satisfactory. According to the information provided by Aumancha, only the toll payments corresponding to November and December 2012 were on arrears as of mid-April 2013. We expect these two bills to be paid imminently, however, given that payment has already been approved with funds from the Spanish government extraordinary financing mechanism established to help local and regional governments pay suppliers. January 2013 toll payment was done on time and there is no other 2013 payment on arrears, given that tolls are set to be paid 60 days on arrears according to the concession contract. Traffic continued its declining trend in 2013, with a year-on-year decline of 6.5% (-5.9% for LVs and -10.5% for and HVs) in the first four months of the year. This was partially offset by toll increases, which has led to year-on-year revenue decline of 2.7% in that period. Recent traffic developments confirmed the high seasonality which this project is exposed to; showing the bridge's distinctive feature of being mainly a holiday route and therefore more sensitive to flows of holidaymakers. As of Aug. 31, 2012, annual traffic levels are in line with previous year-on-year levels. We have revised our base-case scenario for the project's performance, lowering the expected cumulative annual traffic growth rates for 2013 and 2014 to 1.2%, compared with 1.7% previously. However, its supportive concession/tariff mechanism, and recently restrictions imposed on HVs to cross the centre of Millau are increasing the number of HVs using the bridge, have partially offset the effect of traffic volatility on cash flows available for debt service (CFADS). Eurotunnel reported a 10% increase in consolidated revenues for H1 2013, compared with H1 2012; stable EBITDA and net result, excluding the MyFerryLink ferry activities. Summer traffic levels were also reported as very strong, with yields also increasing. Eurotunnel worked closely with the French and U.K. governments in formulating their responses to the European Commission reasoned opinion, submitted at the end of September. The opinion, issued in June 2013, cited high access charges, weak regulation, and a restrictive tunnel usage agreement. Future progress will be closely monitored, though no action is expected in the near term. The project has a strong rationale as the sole high-speed rail connection between London and the Eurotunnel and in addition it benefits from a clear and transparent regulatory framework set up by the Office of Rail Regulation. It is a mix of availability and traffic risk with the former (domestic services) accounting for approx. 60% of total revenues and the latter (international services) mitigated by strong track record and relatively stable traffic volume at present. In addition, currently HSRF1 is showing strong operational performance, well below the penalty threshold.

Autovia de la Mancha, S.A.

AA-(Insured)/stable, B(spur)/Stable

Spain

Lemos, Maria

Verdun Participation 2 S.A.

AA-/Stable, BBB-(insured)/Stable, BBB-(SPUR)/Stable

France

Manuel Dusina

Channel Link Enterprises Finance PLC

AA-/Stable, BBB(SPUR)/Stable,

U.K.

Robin Burnett

High Speed Rail Finance 1 PLC

A-/Stable

U.K.

Manuel Dusina

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT

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Table 6

Issuer Review (cont.)

Energy and Wind Power Breeze Finance S.A. B/Stable, B(SPUR)/Stable and C/Stable Germany Lemos, Maria As of June 2013, the cumulated average IWET index is 86% compared to the expected longtime average around 109% for this period; resulting in lower revenues and a cash flow shortfall of 5.2 million. The project was able to fully cover the A-notes debt service on April 19, 2013 payment date--without using the Class-A debt service reserve account--but the principal redemption on Class B notes(2.15 million) was fully deferred, and 1.74 million out of a 2.24 million of interests were deferred. The C-notes debt service (4.5 million) was fully deferred. While we view a relatively high likelihood that the Class A debt service reserve account (DSRA) will remain unused on the April debt service dates (following the high-wind winter season), we continue to see a relatively high chance that the project may recourse to the reserve on the October debt service payment dates. Although we still lack official figures for 2012 year-end from management; we understand wind revenues were 2% lower than 2011, although considerably above that produced in the historically weakest wind year (2010) and 5% higher than the new IWET-index forecasts. As of first quarter of 2013, real productions was about 26% below expectations, as a result of a very bad wind situation. To date, operating cash has proved sufficient to cover Class A debt service in full & on time, without needing the remaining 10 million of cash in senior DSRA, which remains only partly funded. The U.K. regulator has proposed the development of a single gas network operator for all the transmission lines in Northern Island and the Republic of Ireland. This would replace the existing three operators. Regardless of the final decision, we expect the regulatory framework for Premier Transmission Financing to remain the same credit supportive, which is the main factor underpinning the ratings and outlook on its debt. We understand that, as of the end of March 2013, the DSRA and the cost reserve account remained fully funded with 9.5 million and 3.1 million respectively. On the same date, free cash balances (which include the ratio buffer amounts) stood at 8.1 million. The U.K. regulator has proposed the development of a single gas network operator for all the transmission lines in Northern Island and the Republic of Ireland. This would replace the existing three operators. Regardless of the final decision, we expect the regulatory framework for Belfast Gas Transmission Ltd. to remain credit supportive, which is the main factor underpinning the ratings and outlook on its debt. We understand that, as of March 31, 2013, cash balances at the DSRA (1.83 million) remained fully funded at or above the contractually defined levels. On the same date, cash balances held by the Project Co. in form of various bank deposits and short term high liquid investment stood at 702,000.

CRC Breeze Finance S.A. (Breeze Two Transaction)

C/Stable, B-/Stable

Germany, France

Lemos, Maria

Premier Transmission Financing PLC

A(insured)/Stable, A(SPUR)/Stable

U.K.

Lemos, Maria

Belfast Gas Transmission Financing PLC

AA-(Insured)/stable, A(spur)/Stable

Ireland

Maria Lemos

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Table 6

Issuer Review (cont.)

Exeltium S.A.S. BBB-/Stable (ICR) France Manuel Dusina Exeltium S.A.S. entered into lock up at the end of 2012 following the credit quality deterioration of its put option provider, which is also a material offtaker. We believe that this could dampen the credit quality of Exeltium, only if coupled with a sustained drop in the price of electricity on the French market. The latter would increase the likelihood of offtakers opting out of their contracts in 2020. Furthermore, despite the fact that the average credit quality of the offtaker's pool has deteriorated, we believe the revenue counterparty does not yet constrain the project's current rating. The rating is discounting the key weakness of the structure, refinancing risk. Exeltium has hired advisors to engage in discussion with the French public authorities, solve the lock up situation, and kick off refinancing process. In our view, the operating performance of some of Alte Liebe's WFCs improved slightly during 2012, although wind levels still remain well below the historical wind averages to which the debt was originally sized. Turbine availability remained in line with the average of the past two years and above the sponsor's initial target (97%)--except for Wilmersdorf-Mangelsdorf and Rakow-Gardelegen, where availability fell to about 94%. This underperformance was mainly due to gearbox failures and grid security shutdowns ordered by the utilities, but we understand that the generation loss was largely offset by insurance cover and compensation from the utilities. All wind farm companies serviced their respective on-loan payments with cash flows from operations during 2012, given the relatively good wind conditions.

Alte Liebe 1 Ltd.

B-/Stable; B-(SPUR)/Stable

Jersey

Lemos, Maria

Oil and gas Ras Laffan Liquefied Natural Gas Company Ltd. (II) and Ras Laffan Liquefied Natural Gas Company Ltd. (3) Njord Gas Infrastructure AS A/Stable Qatar Karim Nassif The continued robust crude prices have supported DSCR of 12.6x as of June 30, 2013, under Standard & Poor's criteria. The latter is in line with the 12.3x DSCR forecast for the full year to 31 Dec. 2013. We forecast DSCR above a minimum of 3.9x under our base-case scenario over 2013-2016. No developments since the rating action. Following the change in Government in Norway, we will monitor any signs of policy change as they relate to the regulation of the Gassled asset. No developments since the rating action. Following the change in Government in Norway, we will monitor any signs of policy change as they relate to the regulation of the Gassled asset. ProjectCo was granted a 30-year concession (extendable for two 10-year periods) by the Spanish government in 2008 for the re-development of Castor, a depleted oilfield reservoir. The rating reflects, among other factors, the project's high revenue stability and predictability, and its strategic importance, as well as the transaction's highly leveraged financial profile, partially offset by the credit enhancement provided by a second-lien liquidity facility provided by the European Investment Bank to be used under stress scenarios. Micro-seismic activity detected in the area has stopped the gas injection, important to obtain final acceptance. The suspension would only affect credit quality if it results in the final commissioning being materially delayed beyond the long stop date.

BB/Stable

U.K.

Robin Burnett

Solveig Gas Norway AS

BBB-/Negative

U.K.

Robin Burnett

Watercraft Capital S.A.

BBB/Negative

Luxembourg

Manuel Dusina

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Table 6

Issuer Review (cont.)

Other Ajman Sewerage (Private) Co. Ltd. BB+(insured)/Stable, BB+(SPUR)/Stable United Arab Emirates Karim Nassif Ajman Sewerage's establishment of track record of successful operations since completion of enhancement works in September 2012 along with significant improvement in collections and expectation for financial performance led to an upgrade of the project by 1 notch to BB+ in July 2013. We expect Ajman Sewerage will report debt service coverage ratios (DSCRs) (on a six-month look back basis) of 1.5x or above, under our criteria, over the period 2013 to 2016. The negative outlook on Abengoa reflects a one-in-three chance of a downgrade if the company's liquidity weakens--for instance, due to material unwinding of the sizable working capital deficit--potential proceeds from asset sales are not largely used for debt repayment, or if we do not see deleveraging over the medium term. Specifically, at the current rating level, we expect a substantial reduction in negative consolidated free cash flow from 2014 onward, helped by a significant reduction in capital expenditures, and deleverage to below 9x adjusted debt to EBITDA by mid-2014, and gradually thereafter. We could also downgrade the rating if we were to reassess the business risk profile to weak, for example as a consequence of sales of mature assets or deterioration in profitability or market conditions. Since assigning ratings in August 2013 the project has been performing in line with expectations. Average and minimum DSCRs of 1.20 and 1.18x are anticipated over the project's life.

Abengoa S.A.

B/Neg (ICR)

Spain

Lemos, Maria

Ruwais Power Co. PJSC (Shuweihat 2)

A-/Stable

United Arab Emirates

Nassif, Karim

*Ratings are as of Nov. 13, 2013. SPUR--Standard & Poor's underlying rating.

Recent Rating Activity

Table 7

Recent Rating Activity

All changes from April 1, 2013, to Sept. 30, 2013 No. of issues 1 2 2

Issuer Ajman Sewerage (Private) Co. Ltd. Alpha Schools (Highland) Project PLC Autovia del Camino S.A.

To BB+/Stable BBB+/Positive BB+/Stable

From BB/Positive BBB/Positive BBB-/Negative

Date July 17, 2013 Sept. 3, 2013 June 27, 2013

Reason On good track record and improved financials On improved operations On weaker traffic growth prospects

Consort Healthcare (Mid Yorkshire) Funding PLC CountyRoute (A130) PLC

BBB/Stable B+/Negative

BBB-/Positive BB-/Watch Neg

May 13, On improved operating performance 2013 April 23, 2013 July 30, 2013 Senior debt downgraded on revised maintenance costs On positive dialogue in place between Project, Construction contractor, and the Trust after settlement of outstanding issues

2 1

Healthcare Support (Newcastle) Finance PLC

BB+/Stable

BB+/Watch Neg

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Table 7

Recent Rating Activity (cont.)

Healthcare Support (Newcastle) Finance PLC Healthcare Support (North Staffs) Finance PLC Autovia de la Mancha, S.A. Abengoa S.A. Njord Gas Infrastructure AS Njord Gas Infrastructure AS Northland Resources A.B. Northland Resources A.B. Solveig Gas Norway AS Solveig Gas Norway AS Holyrood Student Accommodation Plc Ruwais Power Co. PJSC (Shuweihat 2) Watercraft Capital S.A. Sustainable Communities for Leeds (Finance) PLC Uliving@Hertfordshire BB+/Watch Neg BBB-/Watch Neg April 18, 2013 Sept. 13, 2013 On second warning notice received 2

BBB-/Stable

BBB-/Positive

On increased operating risk

B/Stable/-B/Negative* BBB+/Watch Neg BB/Stable D NR BBB+/Watch Neg BBB-/Stable BBB/Stable A-/Stable BBB/Negative BBB-/Stable

B+/Negative B+/Watch Neg A-/Watch Neg BBB+/Watch Neg C/Watch Neg D A-/Watch Neg BBB+/Watch Neg

May 28, Downgraded due to continuing arrears. 2013 April 2, 2013 May 2, 2013 Aug. 1, 2013 Sept. 9, 2013 Sept. 9, 2013 May 2, 2013 Aug. 1, 2013 July 15, 2013 Aug. 6, 2013 Aug. 8, 2013 June 21, 2013 On announcement of Befesa disposal On lack of transparency in tariff review process On material tariff reduction On missed interest payment Rating withdrawn at issuer's request On lack of transparency in tariff review process On material tariff reduction New New New New

1 1 4 4 1 1 1 1 2 1 1 1

A-/Stable

May 24, New 2013

NR--Not rated. D--Default. *Issuer credit rating.

Contact Information
Table 8

Contact Information
Credit analyst Michela Bariletti* Robin Burnett Mike Wilkins Maria Lemos Manuel Dusina James Hoskins Karim Nassif Etai Rappel Location Telephone London London London London London London Dubai Tel Aviv (44) 20-7176-3952 (44) 20-7176-7019 (44) 20-7176-3528 (34) 91-389-6951 (44) 20-7176-5530 (44) 20-7176-3393 (97) 1-4372-7152 (972) 3-753-9718 E-mail michela.bariletti@standardandpoors.com robin.burnett@standardandpoors.com mike.wilkins@standardandpoors.com maria.lemos@standardandpoors.com manuel.dusina@standardandpoors.com james.hoskins@standardandpoors.com karim.nassif@standardandpoors.com etai.rappel@standardandpoors.com

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Table 8

Contact Information (cont.)

Tom Dar Luisina Berberian Sofia Grach Watcharee Corkill *Team leader. Tel Aviv London Tel Aviv London (972) 3-753-9722 (44) 20-7176-3276 (972) 3-753-9724 (44) 20-7176-3989 tom.dar@standardandpoors.com luisina.berberian@standardandpoors.com sophia.grach@standardandpoors.com watcharee.corkill@standardandpoors.com

Related Criteria And Research

All articles listed below are available on RatingsDirect on the Global Credit Portal, unless otherwise stated. Project Finance Construction and Operations Counterparty Methodology, Dec. 20, 2011 Updated Project Finance Summary Debt Rating Criteria, Sept. 19, 2007
Additional Contact: Infrastructure Finance Ratings Europe; InfrastructureEurope@standardandpoors.com

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