Moody’s has downgraded Crosslinx Transit Solutions General Partnership’s senior secured rating to Baa3 from Baa2 owing to the “considerable delay” in completing the project.
Although the deal had originally been due to be completed in September 2021, it has since strayed beyond the revised scheduled substantial completion date of February 23, 2023, and Moody’s suggested the Province of Ontario and Metrolinx have so far failed to reach a new agreement on a scheduled completion date with the project company.
It also pointed to the failure of the parties to agree a timely settlement on the outstanding material supervening claims made by Crosslinx, which Moody’s views as a “weakness in the quality of the parties’ relationship, which, if it persists, will make more challenging issues more difficult to address as they arise”.
However, Moody’s acknowledged that the terms of the project agreement give Crosslinx up to 18 months past the scheduled substantial completion date to complete the project without triggering a termination - something that Moody’s believes is sufficient to ensure the project is completed.
The project has faced numerous delays and court cases, and in January last year a $325m settlement was reached between the parties over delays caused by the Covid-19 pandemic.