Lonsdale Finance Pty Limited — Moody’s

Research Announcement:

Moody’s – Port of Melbourne can weather a

moderate escalation in China-Australia trade tensions

Sydney, February 16, 2021 —

» Port of Melbourne’s trade diversity, strong market position and role as an essential infrastructure

asset support credit quality under a moderate hypothetical escalation of the China-Australia trade

dispute

» Shareholders’ commitment to preserving the port’s stable credit quality provides a further buffer

against more severe downside scenarios

Port of Melbourne’s trade diversification and import/export balance will continue to support its credit

quality even in the case of a moderate escalation of the trade disputes between Australia (Aaa

stable) and China (A1 stable), according to Moody’s Investors Service in a new report published

today.
“IMPORTANT NOTICE: MOODY’S RATINGS AND PUBLICATIONS ARE NOT INTENDED FOR

USE BY RETAIL INVESTORS. SUCH USE WOULD BE RECKLESS AND INAPPROPRIATE. SEE

FULL DISCLAIMERS BELOW.”
Lonsdale Finance Pty Limited (Baa2 stable) is the financing vehicle of the Port of Melbourne group

(PoM).
“We stress tested PoM under a hypothetical loss of all the port’s existing exports to China and a

redirection of 30% of these lost trades to other markets. Under this downside scenario, PoM’s credit

metrics will remain consistent with its rating parameters, although with a reduced buffer,” says Simon

Podeivin, a Moody’s Associate Vice President and Analyst.
“Port of Melbourne’s role as an essential infrastructure asset and its strong market position further

shelter its revenue against the risk of trade downside scenarios,” adds Podeivin.
The reliance of PoM’s service area, and Australia in general, on imported goods, given limited

onshore manufacturing capacity for certain consumer goods and the absence of viable alternatives,

support the port’s trade volumes and revenue, even in periods of shock.
In addition, fixed property rents provide revenue stability against PoM’s exposure to volume-driven

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risks, with long-term leases to tenants that mostly have strong credit quality.
PoM’s shareholders’ commitment to preserving stable credit quality offers further support in more

adverse downside scenarios, reflecting their long-term investment horizons and flexibility to provide

support when needed.

Subscribers can access the report “Lonsdale Finance Pty Limited: Port of Melbourne will

withstand difficulties caused by China and Australia trade tensions” at:

http://www.moodys.com/

researchdocumentcontentpage.aspx?docid=PBC_1261815

NOTE TO JOURNALISTS ONLY: For more information, please call one of our global

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This publication does not announce a credit rating action. For any credit ratings referenced in this

publication, please see the ratings tab on the issuer/entity page on

www.moodys.com

for the most

updated credit rating action information and rating history.
Simon Poidevin

AVP-Analyst

Project & Infrastructure Finance

Moody’s Investors Service Pty. Ltd.

JOURNALISTS: 61 2 9270 8141

Client Service: 852 3551 3077
Arnon Musiker

Senior Vice President/Manager

Project & Infrastructure Finance

Moody’s Investors Service Pty. Ltd.

JOURNALISTS: 61 2 9270 8141

Client Service: 852 3551 3077
Releasing Office:

Moody’s Investors Service Pty. Ltd.

Level 10

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Australia

JOURNALISTS: 61 2 9270 8141

Client Service: 852 3551 3077

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