Research Update: Brisbane Airport Rating Affirmed At 'BBB'; Outlook Negative Due To Uncertainty On Traffic Recovery

Weak economic conditions and health concerns in the aftermath of COVID-19 pandemic will suppress traffic levels in fiscal 2021 and result in a long recovery phase to pre-COVID-19 levels at all Australian airports. Based on our traffic estimates, Brisbane Airport Corp. Pty Ltd.'s (BAC or Brisbane Airport) cash flow will weaken further in fiscal 2021 after a drop in fiscal 2020, before recovering from fiscal 2022. FFO to debt will be weak in fiscal 2021, and we expect it could recover close to 9% from 2022, assuming control on operating costs, capex, and shareholder distributions. On June 16, 2020, S&P Global Ratings affirmed its 'BBB' long-term issuer credit rating on Brisbane Airport and the issue ratings on the company's senior

...- Weak economic conditions and health concerns in the aftermath of COVID-19 pandemic will suppress traffic levels in fiscal 2021 and result in a long recovery phase to pre-COVID-19 levels at all Australian airports. - Based on our traffic estimates, Brisbane Airport Corp. Pty Ltd.'s (BAC or Brisbane Airport) cash flow will weaken further in fiscal 2021 after a drop in fiscal 2020, before recovering from fiscal 2022. FFO to debt will be weak in fiscal 2021, and we expect it could recover close to 9% from 2022, assuming control on operating costs, capex, and shareholder distributions. - On June 16, 2020, S&P Global Ratings affirmed its '###' long-term issuer credit rating on Brisbane Airport and the issue ratings on the company's senior secured debt. At the same time, we removed all ratings from CreditWatch, where we placed them with negative implications on March 20, 2020. - The negative rating outlook reflects continued uncertainty in the travel market and Brisbane Airport's minimal financial...

Research Update