Moody's Investors Service and the SH-130 concessionaire in Texas have different views on what a default is. Moody's has announced that it considers SH 130 Concession Company in "technical" default of loan payment agreements.

Moody's acknowledges, however, that the concessionaire is not in legal default.

The announcement follows news that SH 130 Concession reached an agreement to pay a portion of moneys due by June 30, and push its June 30 payment date back to December 15, 2014.

Moody's explained:

"By executing a waiver agreement, we understand that the project is not in legal default. However, Moody's view is that the failure to meet the full payment that was originally scheduled for June 30, 2014 constitutes a default under Moody's definition."

According to WOAI-AM News, a spokesperson of the concessionaire, said:

"The SH 130 is not in default. It has reached an agreement with lenders that modifies the payment date such that no failure to pay occurred. A portion of the payment was made recently and the remainder is due in the future. As a result of the modification, as a matter of fact and as a matter of law, there is no default."

Moody's Investors Service published on June 18th that the SH-30 concessionaire was not attracting sufficient traffic to pay their bank loans.

Moody's said at the time:

"At this time, SH 130 has depleted all but $3.3 million of available liquidity reserves and will not have sufficient funds on hand to fully pay the senior loan interest and related swap payments due on June 30."

In October 2013, Moody's had already downgraded the ratings of the SH 130 Concession Company, LLC to Caa3 from B1, including the Senior Bank Facility with $686 million outstanding and the subordinate Transportation Infrastructure Finance and Innovation Act (TIFIA) loan with $493 million outstanding. Moody's said the rating outlook was negative.

To read the complete history, see the SH-130 concession project profile.