Research Update: Brisbane Airport Corp. Pty Ltd. 'BBB' Ratings Affirmed On Solid Passenger Recovery; Outlook Stable

We anticipate that Brisbane Airport Corp. Pty Ltd.'s (BAC) ratio of funds from operations (FFO) to debt will moderate to 11.9% in fiscal 2024 from 14.4% in fiscal 2023 before trending at around 10%-11% over 2025 and 2026. We anticipate BAC, supported by a strong rebound in traffic, will moderately increase capital expenditure (capex) for growth. Coupled with modest shareholder returns, this should drive the airport's FFO to debt back to levels consistent with the current rating. On July 25, 2024, S&P Global Ratings affirmed its 'BBB' long-term issuer rating on BAC and issue ratings on the airport's rated debt. The stable outlook reflects our view that BAC's current balance sheet strength is transitory. We anticipate FFO to debt to

...- We anticipate that Brisbane Airport Corp. Pty Ltd.'s (BAC) ratio of funds from operations (FFO) to debt will moderate to 11.9% in fiscal 2024 from 14.4% in fiscal 2023 before trending at around 10%-11% over 2025 and 2026. - We anticipate BAC, supported by a strong rebound in traffic, will moderately increase capital expenditure (capex) for growth. Coupled with modest shareholder returns, this should drive the airport's FFO to debt back to levels consistent with the current rating. - On July 25, 2024, S&P Global Ratings affirmed its '###' long-term issuer rating on BAC and issue ratings on the airport's rated debt. - The stable outlook reflects our view that BAC's current balance sheet strength is transitory. We anticipate FFO to debt to moderate to within our rating thresholds over the next three to five years given the company's significant capex pipeline and normalized dividends....

Research Update