RATINGS RATIONALE

"Today's change of outlook reflects the steadily improving business profile of Natex and the increased likelihood that the group will meet the rating guidance for a Baa2 rating over the short to medium term," says Andrew Blease, a Moody's Senior Vice President and lead analyst for Natex. In addition Moody's has revised the rating guidance so that a rating upgrade to Baa2 would be appropriate if Natex was likely to achieve and maintain the following credit metrics: (1) funds from operations (FFO) interest coverage of comfortably over 5.0x; and (2) retained cash flow (RCF)/net debt of over 20%.

Over the past couple of years, Natex has successfully improved its revenues and profitability. Management has completed a business recovery programme, aimed at improving performance materially in all of its business divisions, through turning around the previous weaknesses in the group's performance. Whilst Natex is experiencing a challenge in its UK coach division due to the UK government's withdrawal of senior citizen concessionary fare support, and the UK rail business is now very small and may disappear from 2013 onwards, the past two years have seen significant improvements in the group's UK bus and North American divisions. In addition, Natex's Spanish bus business has held up well in the light of a difficult economic environment in Spain. Moreover, the group has a reasonable liquidity profile, is comfortably in compliance with financial covenants, which Moody's expects to remain the case, and has a good spread of debt maturities.

Natex's rating reflects the following factors: (1) the fundamental market position of its UK coach and Spanish bus business, which Moody's expects to continue to provide a sustainable level of operating cash flow; (2) management's continued focus on improving revenue and operating margins; (3) Moody's working assumption that Natex's rail businesses will expire without renewal; (4) the rating agency's expectation that significant acquisition activity will not feature materially in the group's business plans; and (5) the guarantee provided in respect of Natex's rated debt by an operating subsidiary of the group.

WHAT COULD CHANGE THE RATING UP AND DOWN

A rating upgrade could result from Natex's debt metrics improving to a level consistently above the range for the current rating, namely FFO interest coverage of comfortably over 5.0x and RCF/net debt of over 20%.

Conversely, a rating downgrade would become likely if Natex's debt metrics were to deteriorate to a level consistently below the range for the current rating level, namely RCF/Net Debt of less than 15% and FFO interest coverage trending towards 4.0x.

RATING METHODOLOGY

Natex's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others 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. Moody's compared these attributes against other issuers both within and outside Natex's core industry and believes Natex's ratings are comparable to those of other issuers with similar credit risk. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

National Express Group PLC is a listed UK-based road passenger transport business, providing bus and coach services in the UK, North America and Spain. It had revenues of GBP2.2 billion and GBP2.4 billion of assets as at 31 December 2011.

REGULATORY DISCLOSURES

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Andrew Blease Senior Vice President Infrastructure Finance Group Moody'sInvestors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Monica Merli MD - Infrastructure Finance Infrastructure Finance Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Releasing Office: Moody's Investors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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