Research Update: Irish Airport Operator daa PLC 'A' Rating Placed On CreditWatch Negative Amid COVID-19 Restrictions

The airport sector in Europe is facing an unprecedented decline in air traffic amid the COVID-19 pandemic, which has led governments to introduce travel restrictions and quarantine orders. S&P Global Ratings' current base case is a 25% decrease in passenger traffic for 2020. We now also anticipate a eurozone and U.K. recession in 2020. This would hamper passenger traffic recovery, leading to materially weaker cash flows and credit ratios for European airports than we had previously expected. As we announced on March 26, 2020, we are placing our 'A' long-term issuer credit rating on daa PLC on CreditWatch with negative implications. The CreditWatch placement indicates a one-in-two chance that we could lower our rating on daa if we expected the

...- The airport sector in Europe is facing an unprecedented decline in air traffic amid the COVID-19 pandemic, which has led governments to introduce travel restrictions and quarantine orders. S&P Global Ratings' current base case is a 25% decrease in passenger traffic for 2020. - We now also anticipate a eurozone and U.K. recession in 2020. This would hamper passenger traffic recovery, leading to materially weaker cash flows and credit ratios for European airports than we had previously expected. - As we announced on March 26, 2020, we are placing our 'A' long-term issuer credit rating on daa PLC on CreditWatch with negative implications. - The CreditWatch placement indicates a one-in-two chance that we could lower our rating on daa if we expected the COVID-19 pandemic to lead to a more severe drop in traffic, or the recessionary macroeconomic backdrop to be harsher or more prolonged, resulting in daa's weighted average funds from operations (FFO)-to-debt ratio falling below 20%. We expect...

Research Update