Investor Information
Analyst Communications/PresentationsStatement
Statement on FSA's Exposure to Metronet Rail BCV Finance plc and Metronet Rail SSL Finance plc (London Underground)
July 18, 2007
With respect to Metronet's filings for PPP Administration, FSA does not expect to have a material loss on its insured bonds.
FSA insures two series of bonds - £185 million gross (£90 million net) index-linked senior secured Metronet Rail BCV Finance plc (BCV) and £350 million gross (£170 million net) fixed rate senior secured Metronet Rail SSL Finance plc (SSL). The debt was issued to finance the operation, maintenance and the initial phase of asset upgrades to part of the London Underground.
FSA does not expect a policy claim in the near future, as the transactions have substantial liquidity resources to meet current debt service. Moreover, under the applicable Service Contracts, insured debt holders and bond insurers benefit from an "Underpinned Amount" generally providing that 95% of insured debt will be supported by London Underground Limited if Metronet is unable to meet its obligations.
The most recent debt service payments of £11.9 million gross and £5.8 million net were made as scheduled, by the Metronet companies, to holders of the FSA insured bonds on March 30, 2007. The next debt service payments of £12.0 million gross and £5.8 million net are due to bondholders on September 30, 2007.