...May 8, 2019 MELBOURNE (S&P Global Ratings) May 9, 2019--S&P Global Ratings today said that the buyback of the Qantas domestic terminal by Melbourne Airport (owned and operated by Australia Pacific Airports Corp. Ltd.; A-/Stable/--) paves the way for the airport to progress its planned capital expenditure (capex) with more certainty. The accompanying agreement for terminal charges with Qantas for the use of Terminal 1 will provide greater cash flow certainty. The buyback price is within our expectation and does not affect our credit view on the airport. Melbourne airport has forecast capital investments of about A$2.5 billion to 2022. This can be accommodated within the current rating assuming no change in financial risk appetite. We expect Melbourne airport to operate with cash flow leverage of above 10%. Traffic growth exceeding agreed levels with airlines or a need to enhance facilities could trigger additional expenditure. Likewise, the eventual progress of the third runway could also...
