Research Update: Incheon International Airport 'AA' Rating Affirmed; Outlook Stable; SACP Revised Up To 'bbb+' On Faster Traffic Recovery

Incheon International Airport Corp.'s (IIAC) operating performance and financial metrics are likely to improve over the next 24 months, backed by a faster recovery in passenger traffic at the airport than we expected. We therefore expect IIAC's ratio of funds from operations (FFO) to debt to recover to 10% in 2023 and 11% in 2024, compared with negative FFO in 2022 and 2021. As a result, we revised up our assessment of IIAC's stand-alone credit profile (SACP) by one notch to 'bbb+' from 'bbb'. We continue to equalize the rating on IIAC with our sovereign credit rating on Korea, given our view of an almost certain likelihood of extraordinary government support. We affirmed our 'AA' long-term issuer credit rating on

...- Incheon International Airport Corp.'s (IIAC) operating performance and financial metrics are likely to improve over the next 24 months, backed by a faster recovery in passenger traffic at the airport than we expected. - We therefore expect IIAC's ratio of funds from operations (FFO) to debt to recover to 10% in 2023 and 11% in 2024, compared with negative FFO in 2022 and 2021. As a result, we revised up our assessment of IIAC's stand-alone credit profile (SACP) by one notch to '###+' from '###'. - We continue to equalize the rating on IIAC with our sovereign credit rating on Korea, given our view of an almost certain likelihood of extraordinary government support. - We affirmed our '##' long-term issuer credit rating on IIAC, the sole operator and developer of Korea's primary airport. - The stable rating outlook on IIAC reflects the outlook on the sovereign credit rating on Korea....

Research Update