Ferrovial's UK airports arm said it may not be able to start talks with bondholders about a massive refinancing as soon as planned, knocking the Spanish firm's shares on Friday.
Its BAA unit said it still does not have enough banks to back the already delayed GBP10 billion pound (USD$19.51 billion) asset-backed securitisation (ABS), the biggest ever attempted, but aims to complete the deal by early in the third quarter.
"BAA has not yet finalised certain aspects of its refinancing plans, including completion of the rating process and obtaining sufficient commitments from the banks asked to participate in certain bank facilities," it said in a statement.
One London-based BAA bondholder, who asked not to be named, expressed disappointment at the news: "We would have expected the bank funding to be tied up by now and the rating agencies pretty much ready to go."
BAA originally aimed to seal a deal by the end of last year for the ABS, which will use revenue streams from BAA's airports as collateral, but the global credit crisis has slowed the process.
The world's biggest airports operator with seven in the UK including London's Heathrow and Gatwick, BAA needs an investment-grade rating for the deal before it can move existing bonds into the new structure and reduce its cost of lending.
Ferrovial hopes to move non-convertible sterling and euro bonds into the new structure by the end of the second quarter, completing the refinancing by early in the third.
It bought BAA for GBP10.1 billion in July 2006, nearly trebling its debt levels, and is trying to renegotiate a mixture of existing BAA debt and what it took on to buy the company.
Fears the refinancing may face further delay knocked the shares and they closed down 5.3 percent at 53.75 euros.
However Finance Director Nicolas Villen said in a statement sent just after the close that Ferrovial remained optimistic.
"The process is very advanced in all areas, from the final documentation to obtaining positive ratings," he said.
"Although our (previous) statement contains understandable caution, we are optimistic about the solid support that we are receiving from a good number of banks, despite the current credit market, and also because bond market conditions have improved in the last few weeks," he said.
BAA said shareholders agreed to inject GBP400 million as part of the refinancing.
A spokesman declined to elaborate as to how this would be carried out but traders and bondholders responded positively to the plan, although one pointed out it was only a fraction of the debt BAA was aiming to renegotiate.
"It shows commitment rather than anything else," said one bondholder.
BAA said it would start seeking out leading bondholders to form a negotiating committee, a move seen as premature by some as the structure is not yet in place.
However, one bondholder welcomed the move.
"It's one small step, but we've been waiting a long time, so any news is good news," said Jamie Grant, investment manager at AXA Investment Managers. "It's not going to be a smooth ride that's for sure, it's going to be a long process."
