Sydney, November 06, 2012 -- Moody's Investors Service has today assigned a senior unsecured rating of Baa2 to Leighton Finance (USA) Pty Ltd's ("the Issuer") US$500 million 144A notes maturing in November 2022. The notes are guaranteed by Leighton Holdings Limited ("Leighton") and certain of its subsidiaries.

RATINGS RATIONALE

Leighton Finance (USA) Pty Ltd is issuing:

US$500 million 5.950% Fixed Rate Notes due 13 November 2022

Net proceeds are expected to be applied to reducing existing indebtedness. The issuance will strengthen Leighton's debt maturity and liquidity profile.

The Baa2 rating reflects that the notes will represent senior unsecured obligations of the issuer and will rank pari passu with all other unsecured and unsubordinated debts of the issuer. In addition, the notes will be guaranteed on a joint and several basis by Leighton and certain subsidiaries.

The rating reflects Leighton's strong position as the foremost engineering, mining, operations and building services contractor in Australia. This entrenched market position has allowed it to build a substantial order book which is expected to generate solid cash flows following the completion of the loss-making Airport Link and Victorian desalination projects.

Leighton's operations have benefited from the resurgence in infrastructure and resource spending following a short-lived slowdown in early 2009. This is reflected in a strengthening order book, which has more than doubled over the past five years from A$21.1 billion in June 2007 to A$47.3 billion in June 2012. The strong order book should sustain a high level of construction activity over the medium term despite a more subdued outlook for infrastructure and resource-related projects.

Leighton's rating reflects a weakened credit position following write-downs related to the Airport Link, Victorian Desalination Plant and Habtoor Leighton Group ("HLG") which resulted in Leighton reporting a net loss of A$406 million for fiscal 2011, and constrained net income which totaled A$450 million for the year to June 2012. The writedowns were partially mitigated by Leighton raising A$757 million in equity in April FY2011.

The writedowns highlight the bigger business risk that now drives Leighton's rating. The possibility of further losses exists in relation to HLG albeit the completion of the Airport Link and Victorian desalination projects provides a base for recovery in metrics in line with recent years.

The stable outlook reflects Moody's view that Leighton should maintain a solid business growth profile at the Baa2 rating level, reflected in a strong order book with work-in-hand of around A$47 billion as at 30 June 2012.

Credit metrics for the 12 months ended June 2012 were: adjusted Debt/EBITDA 2.0 times, EBITA/Interest 3.3x, but with low CFO/Debt of 4.8% reflecting the impact of the legacy contracts over the 12 months. Moody's expects Debt/EBITDA, adjusted for capitalised leases, to be between 1.7 and 2.0 times over the next two years and EBITA/Interest to be around 4.0x with CFO/Debt also improving as the adverse impact of the legacy contracts dissipates.

The rating is unlikely to be upgraded in the medium term, given the need to deliver the large projects based on the revised budget and timeline.

Negative rating pressure could evolve with further losses incurred from its major projects and / or deterioration in the outlook for HLG receivables resulting in a reduction in cash on hand from levels consistent with the past 2-3 years and/or a ratio of adjusted debt/EBITDA of over 2.75 times on a sustained basis, or EBITA/Interest cover of less than 2.5 times on a sustained basis. The rating may also be pressured should HOCHTIEF, now majority owned by ACS, seek to appoint a majority of the directors on the Board, which is currently not expected, or more actively influence policy.

The principal methodology used in rating Leighton Finance (USA) Pty Ltd was the Global Construction Industry Methodology published in November 2010. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Leighton Holdings Limited based in Sydney, Australia, is the largest construction and mining contractor in that country and has operations in Asia and the Gulf.

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