Transport for London’s credit rating has been downgraded by Moody’s Investor Service due to concerns over operating performance and long-term funding.
Moody’s downgraded TfL’s long-term senior unsecured debt rating to Baa1 from A3 and its long-term EMTN (Euro Medium-Term Note) programme rating to Baa1 from A3. However, the outlook assessment has changed to “stable” from “negative”.
“The downgrade reflects Moody’s view that TfL’s operating performance will be weaker than expected due to new hurdles, namely weaker economic growth and higher inflation, hindering the recovery of passenger growth,” Moody’s confirmed in a statement.
“The downgrade also reflects the ongoing uncertainty around TfL’s long-term funding framework, especially for capital funding.”
TfL is the local government body responsible for most of the transport network in London. A spokesperson said that passenger numbers were continuing to grow, with the tube now seeing more than two-thirds “ridership” on weekdays compared with pre-pandemic levels and buses consistently being at 75-80% of pre-pandemic levels.
“With the forthcoming opening of the Elizabeth Line, the completion of the Bank station capacity upgrade and delivery of more UK-built zero-emission buses across the city, public transport will continue to make a vital contribution to the economic recovery of London and the wider country.
“To ensure this recovery is successful, it is crucial that a longer-term settlement with government is confirmed. Our discussions with government on this continue.”
Moody’s also recently downgraded Warrington Borough Council’s long-term issuer rating and senior unsecured debt rating to A3 from A2 and its baseline credit assessment to baa3 from baa2.
—————
FREE weekly newsletters
Subscribe to Room151 Newsletters
Room151 LinkedIn Community
Join here
Monthly Online Treasury Briefing
Sign up here with a .gov.uk email address
Room151 Webinars
Visit the Room151 channel
