Recipient email addresses will not be used in mailing lists or redistributed.
Use semicolon to separate each address, limit to 20 addresses.
characters you see
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
Don't want to see this again?
Accept our to continue to Moodys.com:
AND SCROLL DOWN!
By clicking “I AGREE” [at the end of this document],
you indicate that you understand and intend these terms and conditions to be
the legal equivalent of a signed, written contract and equally binding, and
that you accept such terms and conditions as a condition of viewing any and all
Moody’s information that becomes accessible to you [after clicking “I AGREE”] (the
“Information”). References herein to “Moody’s” include Moody’s
Corporation, Inc. and each of its subsidiaries and affiliates.
Terms of One-Time Website Use
you have entered into an express written contract with Moody’s to the contrary,
you agree that you have no right to use the Information in a commercial or
public setting and no right to copy it, save it, print it, sell it, or publish
or distribute any portion of it in any form.
acknowledge and agree that Moody’s credit ratings: (i) are current opinions of
the future relative creditworthiness of securities and address no other risk; and
(ii) are not statements of current
or historical fact or recommendations to purchase, hold or sell particular
securities. Moody’s credit ratings and
publications are not intended for retail investors, and it would be reckless
and inappropriate for retail investors to use Moody’s credit ratings and
publications when making an investment decision. No
warranty, express or implied, as the accuracy, timeliness, completeness,
merchantability or fitness for any particular purpose of any Moody’s credit
rating is given or made by Moody’s in any form whatsoever.
3. To the extent permitted by law, Moody’s and its directors,
officers, employees, representatives, licensors and suppliers disclaim
liability for: (i) any indirect, special, consequential, or incidental losses
or damages whatsoever arising from or in connection with use of the
Information; and (ii) any direct or compensatory damages caused to any person
or entity, including but not limited to by any negligence (but excluding fraud
or any other type of liability that by law cannot be excluded) on the part of
Moody’s or any of its directors, officers, employees, agents, representatives,
licensors or suppliers, arising from or in connection with use of the
4. You agree to read [and
be bound by] the more detailed disclosures regarding Moody’s ratings and the
limitations of Moody’s liability included in the Information.
5. You agree that any disputes relating to this agreement or your use of
the Information, whether sounding in contract, tort, statute or otherwise,
shall be governed by the laws of the State of New York and shall be subject to
the exclusive jurisdiction of the courts of the State of New York located in
the City and County of New York, Borough of Manhattan.
Global Credit Research - 12 Dec 2017
CAD1,370 million of rated debt affected
New York, December 12, 2017 -- Moody's Investors Service (Moody's) said today that Collectif
Sante Montreal S.E.C's (Project Co) Baa2 senior secured
rating and negative outlook will not be impacted by the intended change
in the construction company responsible for the Phase 2 of the project
as we view the change, in and of itself, to be credit neutral
in the short-run with credit positive attributes longer term.
Project Co is proposing a transaction that would result in the existing
contractor, a joint venture between Obrascon Huarte Lain (OHL,
B3, ratings under review for upgrade) and Laing O' Rourke,
no longer being responsible for Phase 2 of the project. Instead,
Pomerleau Inc., a Quebec based construction company,
would become the constructor for Phase 2 while the Phase 1 constructor
would remain responsible for all remaining Phase 1 obligations such as
minor deficiencies, deferred works, warranties, latent
defects etc. While Phase 1 lenders (the only lenders to the project)
are not directly exposed to Phase 2 risk, Moody's based our
assessment on whether the proposed transaction could either a) result
in stranded obligations for Project Co or reduced rights and benefits
under the two construction agreements compared to the existing construction
contract; or b) result in additional strain on the relationship between
Project Co and the Centre Hospitalier de l'Universite de Montreal
(CHUM, the Authority) if Phase 2 is delayed or is problematic.
Overall, we believe that the proposed transaction is credit neutral
to even somewhat credit positive for Project Co for the following reasons:
- The two phases will now become clearly delineated and separate
although there are some interfaces which seem to be well addressed in
the proposed documents;
- The proposed documentation seems to be clear as to the allocation
of responsibilities between the parties, with Pomerleau taking on
all the risks of Phase 2 (unless created by the Phase 1 constructor in
which case Pomerleau's recourse will be solely against the Phase
1 constructor and Phase 1 constructor has posted some security for the
benefit of Pomerleau to deal with that eventuality); In the meantime,
the Phase 1 constructor is clearly responsible for the remaining Phase
1 obligations as well as the energy model for the project;
- The proposed transaction also results in incremental security
on an aggregate basis for the benefit of Project Co, and more specifically,
a better division of security intended to back the remaining possible
Phase 1 issues versus possible Phase 2 issues as well as a more robust
security against subcontractor liens. We note that subcontractor
liens are still elevated which represent an additional risk for Project
Co unless properly addressed and secured. Moody's understand
that progress has been made to address these liens and the proposed security
from the Phase 1 constructor will specifically address the remaining liens;
- We understand that CHUM is supportive of the transaction as it
has an established relationship with Pomerleau who built the research
centre (Acces Recherche Montreal, A1 stable) a few years ago for
CHUM on time and budget;
- Pomerleau is a well-established construction company in
Montreal with a good track record in P3 and health facilities.
It also has a strong understanding of the local sub-contractor
market, utilities, construction codes and other critical elements
of the project. Phase 2 is not as complex and large as Phase 1
being only offices, an ambulatory care facility and an auditorium
with a construction price that is just 25% of the overall project
price. That said, Phase 2 is a fairly large project for Pomerleau
to undertake on its own;
- Pomerleau is posting solid liquidity and security against its
Phase 2 obligations, and we note that none of that liquidity is
needed to service Project Co debt since the latter is fully serviced from
current availability payments made by CHUM with respect to Phase 1.
The negative outlook remains unchanged as Collectif Sante Montreal has
not yet achieved final completion of Phase 1 and final completion may
not be reached until spring 2018 when a very complex building management
system is expected to be finalized. We further note that the project
has underperformed since reaching substantial completion in March 2017
causing failure points to accumulate fairly rapidly in the last couple
of months. In that regard, if performance does not turn around
or if a solution is not found between the parties to recognize the delay
in the delivery of the building management system, failure points
could accumulate to a level where an event of default under the project
agreement could be declared, giving CHUM the right to terminate
the project agreement. Mitigating this underperformance is the
fact that the failure points associated with deductions have all passed
been down to the Phase 1 constructor, whose payment obligations
are supported by letters of credit and, to a lesser degree,
to the service provider so that the cash flow implications to Project
Co remains unaffected by this underperformance. While this recent
performance is credit negative, we note that parties continue to
work cooperatively to address various issues, and as such,
as long as progress is made to reach final completion of Phase 1,
we believe that the Authority would not declare a project agreement termination
even if failure points reached the default levels. However,
should that assumption be proven incorrect, the potential for a
multiple notch rating change might emerge.
WHAT COULD CHANGE THE RATING UP/DOWN
To that point, the rating could be downgraded if the Authority indicates
any intention to terminate the project agreement as a result of either
delays in completing Phase 1 of the project or operating performance issues.
Other possible triggers for a downgrade could be the weakening of the
credit quality of the key parties involved in the project.
Conversely, while positive rating pressure in the near-term
is unlikely, an upgrade could be considered should final completion
of Phase 1 be reached in the early part of 2018, failure points
and deductions decrease to the level that is expected of an operator such
as Veolia, sub-contractor liens are reduced to an immaterial
level, and should Phase 2 proceed as planned.
Collectif Santé Montréal S.E.C is a special
purpose entity which in June 2011 issued CAD1.37 billion of senior
secured amortizing bonds in order to mostly fund the design and construction
of a new healthcare facility in downtown Montréal, Canada.
The new facility, when built, will combine three existing
hospitals into one new hospital. Phase 1 reached substantial completion
in March 2017. As well, Collectif Santé Montréal
S.E.C. will maintain and operate the facility until
This publication does not announce a credit rating action. For
any credit ratings referenced in this publication, please see the
ratings tab on the issuer/entity page on www.moodys.com
for the most updated credit rating action information and rating history.
Catherine N. Deluz
Senior Vice President
Project Finance Group
Moody's Canada Inc.
70 York Street
Toronto, ON M5J 1S9
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Associate Managing Director
Project Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.
All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.
Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com
under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”
Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.
Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.