Moody’s reviews BBI Finance’s B1/B2 ratings with direction uncertain

Sydney, October 02, 2009 -- Moody's Investors Service has today placed 
Babcock and Brown Infrastructure Group's (BBI) B1 corporate family rating 
on review with direction uncertain. In addition, the B2 senior secured 
rating of BBI Finance Pty Ltd is on review with direction uncertain.

"The review considers BBI's equity recapitalisation proposal involving a 
potential cornerstone investor," says Clement Chong, a Moody's VP/Senior 
Analyst, adding, "At the same time, the review considers the uncertainty 
of the outcome in respect of the proposal and the impact this could have 
on BBI's credit profile."

"Should the recapitalisation proceeds, Moody's expects BBI's liquidity
and financial profile to improve materially, and its ratings could be 
upgraded by more than one notch," says Chong.

"If the proposal does not go ahead, and in the absence of any other
imminent recapitalisation or asset sale initiatives, BBI's ratings could 
be downgraded due to the looming refinancing challenges," Chong follows. 

The review would focus on the outcome of the recapitalisation discussions
and the impact that a proposal, or absence thereof, would have on BBI's 
financial leverage and liquidity position.

The last rating action with respect to BBI was taken on 8 September,
2009, when the outlook on the group's B1 corporate family rating and B2 
senior secured rating was changed to negative due to refinancing concerns.

BBI ratings were assigned by evaluating factors we believe are relevant
to the credit profile of the issuer, such as BBI's i) business risk and 
competitive position versus other companies within the industry; ii) 
capital structure and financial risk; iii) projected performance over the 
near to intermediate term; and iv) management's track record and 
tolerance for risk.

These attributes were compared with other issuers both within and outside
BBI's core industry; its ratings are believed to be comparable with
those of other issuers of similar credit risk.

BBI, based in Sydney, is an infrastructure fund which owns a series of 
infrastructure assets.