Research Update: Brisbane Airport Corp. 'BBB' Ratings Affirmed; Outlook Stable; Liquidity Assessment Revised To Adequate

Solid domestic traffic, progressive recovery in international traffic, and agreed aeronautical charges at Brisbane Airport Corp. Pty Ltd. (BAC) will lift the airport's cash flows. Increasing capital expenditure (capex), higher interest costs, and the resumption of shareholder distributions will see BAC's ratio of funds from operations (FFO) to debt decline to 9%-10% in fiscal 2024, from 13% in fiscal 2023, as the benefits of restructured interest rate swaps fall away. We have revised our liquidity assessment for BAC to adequate from strong due to forecast higher capex and debt maturities during the next two years. On July 26, 2023, S&P Global Ratings affirmed its 'BBB' long-term issuer credit rating on BAC, reflecting continued growth in passenger traffic and our view

...- Solid domestic traffic, progressive recovery in international traffic, and agreed aeronautical charges at Brisbane Airport Corp. Pty Ltd. (BAC) will lift the airport's cash flows. - Increasing capital expenditure (capex), higher interest costs, and the resumption of shareholder distributions will see BAC's ratio of funds from operations (FFO) to debt decline to 9%-10% in fiscal 2024, from 13% in fiscal 2023, as the benefits of restructured interest rate swaps fall away. - We have revised our liquidity assessment for BAC to adequate from strong due to forecast higher capex and debt maturities during the next two years. - On July 26, 2023, S&P Global Ratings affirmed its '###' long-term issuer credit rating on BAC, reflecting continued growth in passenger traffic and our view of disciplined timing of capex. - The stable outlook reflects our view that BAC will maintain a ratio of FFO to debt at more than 9% over the next few years through continued discipline in shareholder distributions...

Research Update