(The following was released by the rating agency)
SYDNEY (Standard & Poor's) Oct. 8, 2012--Standard & Poor'sRatings Services said today that its rating on QR National Ltd.(QRN; BBB+/Stable) is not immediately affected by the company'sagreement with Queensland Treasury Holdings Pty Ltd. (QTC) tobuy back A$1 billion of QRN shares currently held by QTC. Thisagreement is subject to QRN shareholders' approval and, ifsuccessful, the transaction is expected to be concluded by theend of November.
We expect the buyback to be primarily debt-funded, whichwould reduce the buffer in the company's financial metrics. Wenow expect the funds from operations (FFO)-to-debt ratio forfiscal 2013 to be at the lower end of the 35%-to-40% range weexpect for the 'BBB+' rating, compared to an FFO-to-debt ratioof more than 65% in fiscal 2012. Therefore, we view that therating on QRN would be potentially more sensitive to an adversebusiness environment and the company's future capital managementand investment initiatives.
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